The Greening Of Financial Services: Challenges For Bank And Insurance Green And Sustainability Hybrids

Growing interest seen in using green and sustainability-linked structures to access the hybrid capital market where banks and insurers are frequent issuers of deferrable subordinated instruments that qualify as regulatory capital. The growing importance of ESG factors for investors is reflected in the green and sustainability-linked hybrid capital market for banks and insurers. Banks and insurers may be more able to access the growing demand for green and sustainability assets based on broader business model commitments and progress. Banks and insurers with a strong green credentials and a sustainable foundation of their broader business models than on the necessarily imperfect ring-fencing of individual hybrids are expected to have broader access to green and sustainability-linked hybrid structures.