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At COP29, nearly 200 countries are negotiating a new finance goal to aid the world's poorest economies in decarbonizing and adapting to climate change. Developed nations are indicating that a significant portion of the promised finance will need to come from sources beyond government control, such as the private sector. However, highly indebted developing countries are advocating for publicly financed grants instead of relying on private finance. The summit aims to agree on a new climate finance goal, potentially reaching up to $2 trillion annually, with a focus on involving private financial institutions and multilateral development banks. The challenge lies in mobilizing funds from third parties not directly involved in the UN process, raising questions about credibility and accountability. [Extracted from the article]

Development banks, including the World Bank and the European Investment Bank, have pledged to raise $120 billion in annual climate finance for developing nations by 2030. This commitment, made at the COP29 talks in Azerbaijan, aims to assist poorer countries in reducing emissions and adapting to climate change impacts. The banks emphasize the need for increased contributions from country shareholders to scale up climate finance, with a focus on facilitating private sector investment. The goal is a significant increase from the $75 billion raised in 2023, with expectations to mobilize an additional $65 billion from the private sector by the end of the decade. [Extracted from the article]

A new initiative led by France and Indonesia, the Coal Transition Commission, aims to accelerate the closure of polluting coal plants by involving private finance in cutting emissions. The group's report, presented at the COP29 climate summit, emphasizes the need for innovative financing solutions and the repurposing of coal plants to reduce emissions. While some environmental campaigners are skeptical of the proposed strategies, the commission recommends relaxing sustainability criteria and recognizing emissions cuts at coal plants as transition finance to achieve the goal of early coal retirement. [Extracted from the article]

The 16th United Nations Biodiversity Conference in Cali, Colombia, ended in limbo as countries sparred over funding for a new global nature fund. Despite some progress, negotiations were deadlocked, leading to the suspension of the summit for lack of a quorum. The conference aimed to advance a landmark biodiversity pact adopted in Montreal two years ago, but disagreements over finance and resource mobilization hindered the achievement of key goals. The creation of a new Cali Fund to protect nature, funded by companies using genetic data, was a notable outcome, but the lack of substantial progress on finance poses challenges in halting and reversing nature loss by 2030. [Extracted from the article]

The 16th United Nations Biodiversity Conference in Cali, Colombia was suspended due to countries failing to agree on a new global fund for nature, with developing countries pushing for its creation while developed nations like the EU and Switzerland raised objections. The conference remains suspended, with no set date for resumption, but agreements on a separate fund for nature protection and the inclusion of Indigenous peoples in decision-making still stand. Delegates worked to build on a global biodiversity pact from two years ago, but concerns remain about the lack of additional funding and transparency in government cooperation. [Extracted from the article]

A senior banker at UBS Group AG, Ramzi Issa, known for pioneering debt-for-nature swaps, has left the firm. UBS is currently working on a $300 million debt swap for Barbados, focusing on climate-resilient infrastructure. Debt-for-nature swaps have become a key financial instrument for promoting biodiversity, with potential to unlock up to $100 billion in climate and nature finance. [Extracted from the article]

A senior banker at UBS Group AG, Ramzi Issa, known for pioneering debt-for-nature swaps, has left the firm. Issa, who previously worked at Credit Suisse, was appointed head of global structured credit and sustainable credit products at UBS. UBS is currently working on a $300 million debt swap for Barbados, focusing on climate-resilient infrastructure. Debt-for-nature swaps aim to help developing economies refinance debt and allocate savings to nature conservation. [Extracted from the article]

Bank of America Corp. anticipates a significant breakthrough in the global carbon credit market, with negotiations at the COP29 climate summit potentially leading to an agreement under Article 6.4. This agreement could standardize supply and enhance liquidity in the market, which BloombergNEF estimates could reach a value of over $1 trillion by 2050. Despite efforts to address risks and restore confidence in the voluntary carbon market, companies remain cautious due to concerns about greenwashing scandals. Bank of America is exploring financing structures for carbon-credit project developers and is willing to include carbon credits from the secondary market in its client solutions. [Extracted from the article]

The emerging ESG debt market, supported by JPMorgan Chase & Co. and Bank of America Corp., is set to expand with a new agreement in Colombia for debt-for-nature swaps. Nonprofits like The Nature Conservancy and WWF are collaborating to create a shared pipeline of deals that adhere to common standards, potentially unlocking up to $100 billion in climate and nature finance. This initiative aims to refinance countries' debt on better terms, allocating savings to environmental protection, and is a key focus at the United Nations biodiversity summit, COP16. The coalition of nonprofits is working to develop common standards for structuring deals and increase public funds to attract private investors for conservation efforts. [Extracted from the article]

The UN Biodiversity Talks, known as COP16, have shifted from implementation to encouragement, according to Astrid Schomaker, the executive secretary of the United Nations Convention on Biological Diversity. Progress is being made, but negotiations remain slow, particularly regarding financing ecosystem protection and combatting 'biopiracy.' The issue of biodiversity credits, similar to carbon credits, has sparked intense debate, with differing views on trading credits to protect nature. The summit has over 20,000 delegates registered, making it the largest biodiversity COP on record. [Extracted from the article]

The article discusses the decline in sales of carbon offsets, particularly those tied to renewable-energy projects, due to concerns about their effectiveness in reducing emissions. Major companies like Delta Airlines, Google, and EasyJet have stopped purchasing these credits, while others like Volkswagen and TotalEnergies continue to do so. The rejection of these cheap credits has led to a shift towards more expensive methods of reducing emissions, such as sustainable aviation fuel. The article also highlights the emergence of new buyers and markets for carbon offsets, indicating a changing landscape in the industry. [Extracted from the article]

A group of hedge-fund veterans, led by Newmarket Capital, has agreed to purchase part of the risk on a loan portfolio from the Inter-American Development Bank Group. This transfer of balance-sheet exposure is seen as a new business model that could help multilateral lenders increase lending capacity. The deal, known as Scaling4Impact, allows the IDB to alleviate 10% of mezzanine risk and is part of a broader trend towards synthetic securitizations to boost financial clout and environmental considerations for multilateral lenders. Private investors like Newmarket are showing interest in these structures, signaling a potential shift in risk-return profiles for development lending. [Extracted from the article]

A group of hedge-fund veterans led by Newmarket Capital has agreed to purchase part of the risk on a loan portfolio from the Inter-American Development Bank Group, allowing for the transfer of balance-sheet exposure and freeing up $500 million for loans in Latin America and the Caribbean. This innovative deal, known as Scaling4Impact, falls in line with recommendations for multilateral development banks to expand lending capacity by $200 billion over the next decade. The transaction represents a new business model that could pave the way for more collaborations between multilateral lenders and the private sector to increase financial clout and address environmental considerations. [Extracted from the article]

The Inter-American Development Bank Group has engaged in its first capital-relief deal, transferring risk from a $1 billion loan portfolio to investors led by Newmarket Capital. This move is part of a new business model aimed at increasing lending capacity in Latin America and the Caribbean to address poverty and environmental concerns. Multilateral lenders are increasingly turning to risk transfers to expand their operations and address challenges posed by climate change and the Covid pandemic. This deal with Newmarket represents a shift towards innovative financing structures that involve private investors and could have significant implications for the future of multilateral lending. [Extracted from the article]

Barclays analysts have raised concerns about the financial and environmental implications of a debt-for-nature swap between JPMorgan Chase & Co. and El Salvador. While the deal allows El Salvador to refinance $1 billion in debt and allocate $350 million towards conservation, questions have been raised about the country's suitability for such a transaction due to low biodiversity scores and high bond prices. Transparency around transaction fees and potential cuts to environmental budgets have also been highlighted as areas of concern. The deal, which is the second-largest of its kind, aims to protect the Rio Lempa river ecosystem, but the analysts caution that El Salvador's track record with conservation may pose challenges in effectively implementing the program. [Extracted from the article]

Delegates from nearly 200 countries are convening in Cali, Colombia for the UN biodiversity summit to address the alarming rate at which nature is disappearing. The summit aims to assess progress on implementing the 2022 Global Biodiversity Framework, which includes goals such as protecting 30% of the world's land and sea. Key issues at the summit include combatting 'biopiracy,' ensuring countries submit national biodiversity plans, and raising $700 billion annually for nature protection and restoration. Developed countries have committed to contributing $20 billion per year by 2025 to poorer nations, but challenges remain in allocating funds effectively. [Extracted from the article]

JPMorgan Chase & Co. recently completed a $1 billion debt-swap deal for El Salvador, representing 14% of the country's debt, to focus on conserving its longest river. This innovative arrangement involved repurchasing bonds at a discount and issuing new notes, with support from various organizations and credit enhancements to lower borrowing costs. The deal aims to generate savings for El Salvador to protect the Rio Lempa river and its ecosystem, addressing environmental and economic challenges faced by the country. [Extracted from the article]

Debt-for-nature swaps, a financial instrument pioneered by Credit Suisse, are gaining popularity on Wall Street as a way to refinance government debt and fund sustainable projects. Several major banks, including JPMorgan Chase and Goldman Sachs, are involved in structuring these swaps for countries like El Salvador and Ecuador. While there is growing interest in these swaps, concerns have been raised about transparency, scalability, and community consultation in some deals. Efforts are underway to streamline the process and ensure the impact of these swaps is credible and efficient. [Extracted from the article]

King Charles III of Britain has signed over part of his Sandringham Estate to a private company to restore its wetlands, meadows, and ancient forest, creating tradable biodiversity credits. This initiative is part of efforts to counter the crisis of nature loss globally. The project aims to restore the land to its former glory while generating revenue through nature-friendly projects. The biodiversity credits market is gaining interest from financial institutions, but critics express concerns about the effectiveness and integrity of such initiatives. [Extracted from the article]

Companies are becoming less interested in purchasing carbon offsets due to increasing criticism from scientists and experts. Last year, purchases of offsets by banks, airlines, and industrial companies decreased for the first time. However, even as overall transactions declined, corporate buyers increased purchases of offsets from wind, hydro, and solar projects, which are considered controversial because these sources of power are already the cheapest option in most parts of the world. Many companies are now distancing themselves from these offsets, but continue to offer them to customers. The market for carbon offsets has become problematic as many offsets available today do not remove carbon dioxide from the atmosphere, but only claim to avoid releasing more CO2. Additionally, there have been numerous problems with offset projects worldwide, including false promises and profiteering. While some companies are shifting to more expensive offsets that remove CO2 from the atmosphere, others have been slower to adapt. The future of the carbon offset market is uncertain, with some experts believing that a new approach is needed. [Extracted from the article]

Some of the world's largest banks, including JPMorgan Chase, Standard Chartered, Citigroup, Bank of America, HSBC, and Deutsche Bank, are attending the United Nations' COP16 biodiversity summit to explore the financial potential of nature and biodiversity. Banks and asset managers are increasingly interested in biodiversity as a new area for financial engineering, while the UN has warned that private finance is necessary to combat species extinction and environmental degradation. The summit aims to assess progress made since 2022 and the adoption of the Global Biodiversity Framework, which requires an additional $700 billion in annual spending to halt and reverse nature loss by 2030. Banks are looking to develop new products and identify investible opportunities related to biodiversity, such as debt-for-nature swaps and biodiversity credits. The private sector is also facing pressure to report nature-related risks, and banks have created senior roles to track regulatory and product developments in biodiversity. Attendance at COP16 is expected to reach a record high of around 14,000 delegates. [Extracted from the article]

Whitehaven Coal, one of Australia's largest coal producers, has decided to abandon its planned special purpose vehicle (SPV) for in-house insurance after finding external insurers willing to take on the risk. The company's recent acquisition of coking-coal operations has diversified its portfolio and improved its access to insurers. Access to insurance is becoming a key indicator of corporate anxiety related to climate change. While some insurers are retreating from the fossil fuel industry, Whitehaven has found external insurers for its needs. The company has not ruled out creating an in-house SPV in the future. [Extracted from the article]

The article discusses the legal uncertainty surrounding carbon credits and its impact on the carbon market. While carbon credits are certificates representing a one-ton drop in greenhouse gas emissions, their legal status as assets is still unclear. This lack of clarity hinders banks and investors from allocating significant funds to carbon credits. Efforts are being made by organizations like the World Bank and Unidroit to establish principles to guide governments globally on this issue. The article emphasizes that resolving the legal uncertainty is crucial for the growth and scalability of the carbon market. [Extracted from the article]

According to Henry Fernandez, the CEO of MSCI Inc., carbon credits should be included as part of the solution for reducing carbon footprints. Carbon credits, which are bought and sold on the Voluntary Carbon Market, have faced criticism for greenwashing. Fernandez believes that voluntary carbon markets are necessary for addressing climate change and that it would be unreasonable to exclude them. MSCI estimates that the market for carbon credits decreased by 22% last year to $1.1 billion, and the company is currently assessing 4,000 projects to determine their quality. Fernandez stated that MSCI aims to bring more integrity, data, and quality to the carbon credits market. [Extracted from the article]

Funds that focus on companies with strong biodiversity credentials are performing better than other climate-related investments, with total assets reaching over $3.9 billion, a 45% increase in the past year. These funds have seen average returns of about 11% this year, while benchmarks related to renewable energy, carbon, and electric vehicles have declined. The finance industry has been compelled to prioritize natural resources following a deal struck in December 2022, leading to increased investments in firms working to halt and reverse nature loss. As countries prepare for the United Nations biodiversity conference, investor demand for biodiversity-focused funds is expected to accelerate. [Extracted from the article]

Regional banks in the US and Canada are increasing their involvement in oil, gas, and coal deals, filling the gap left by European banks that have retreated from financing fossil fuels due to climate regulations. Texas Capital Bank has made significant gains in this sector, along with other banks such as Truist Securities, FHN Financial, Cadence Bank, BOK Financial Corp., and Canadian Western Bank. The rise of these regional banks represents a shift in the industry, as they are not subject to the same regulations as larger banks. However, the financing of fossil fuels continues to be big business for Wall Street banks like Wells Fargo, JPMorgan Chase, and Bank of America. Additionally, fossil fuel clients are increasingly accessing financing outside of the banking sector, with banks helping to establish connections with alternative sources of capital. [Extracted from the article]

Regional banks in the US and Canada, such as Texas Capital Bank, Truist Securities, and BOK Financial, are increasing their involvement in oil, gas, and coal deals as European banks retreat from the sector due to climate regulations. These regional banks are climbing the league table of top lenders in fossil fuel transactions, and they are benefiting from a period of consolidation in the US oil and gas sector and declining interest rates. This shift towards regional banks in the financing of fossil fuels is seen as a significant change for the industry, although concerns have been raised about the lack of prudential regulations for these smaller banks. Meanwhile, large banks on Wall Street, including Wells Fargo, JPMorgan Chase, and Bank of America, continue to provide significant loans for the fossil fuel sector. The study also highlights the phenomenon of finance substitution, where fossil fuel clients are finding alternative sources of financing outside the banking sector. [Extracted from the article]

Regional banks in the US and Canada are increasing their involvement in oil, gas, and coal deals, filling the gap left by European banks that have retreated from the sector due to climate rules. Texas Capital Bank has made significant gains in the past 2.5 years, along with other banks such as Truist Securities, FHN Financial, Cadence Bank, BOK Financial Corp., and Canadian Western Bank. This shift in financing for fossil fuels is seen as a significant change for the industry, as smaller banks are not subject to the same regulations as larger banks. However, larger banks like Wells Fargo, JPMorgan Chase, and Bank of America continue to be major lenders in the sector. The study also found that fossil-fuel clients are increasingly accessing financing outside of the banking sector, with banks helping to establish connections with alternative sources of capital. [Extracted from the article]

Goldman Sachs and Bank of America are reportedly working on a debt-swap deal with Ecuador to help the country manage its debt financing costs. In exchange for better terms on a new bond, Ecuador would pledge to protect part of the Amazon rainforest. The deal would take the form of a debt-for-nature swap, which typically involves guarantees from multilateral lenders to keep debt costs down for the borrower. The Nature Conservancy would serve as an advisor on the deal. Last year, Ecuador completed a similar debt-for-nature swap that is expected to generate over $1 billion in savings for the government while protecting the Galapagos Islands. [Extracted from the article]

German authorities have rejected €18 million worth of carbon credits due to "irregularities" in China-based projects aimed at reducing emissions. These projects, run by international corporations and audited by European firms, allowed German companies to report lower emissions by funding pollution-cutting efforts during oil and gas production. However, many avoided-emissions credits have been found to exaggerate their green claims, leading to increased scrutiny. Germany's Federal Environment Agency has identified malpractice in eight projects and rejected 215,000 carbon credits linked to those projects. The agency will continue to investigate similar initiatives and has hired an international law firm to physically visit sites in China. [Extracted from the article]

German authorities have rejected 215,000 carbon credits worth €18 million due to "irregularities" found in an investigation. The malpractice relates to upstream emissions reductions (UER), which companies can use to comply with European fuel emission laws. The decision affects eight projects in China, and no new UER certificates from these projects will be released. UER credits have faced scrutiny in recent years, and the German authorities are continuing their investigations into other projects. The probe has identified legal and technical inconsistencies in seven of the eight projects, and Berlin's public prosecutor is investigating 17 individuals for potential fraud. [Extracted from the article]

Goldman Sachs and Bank of America are reportedly working on a debt swap deal with Ecuador that would help the country manage its debt financing costs in exchange for a commitment to protect part of the Amazon rainforest. The deal, known as a debt-for-nature swap, would involve refinancing a portion of Ecuador's existing debt by selling a new bond at better terms, with some of the savings going towards nature conservation. The Nature Conservancy will serve as an advisor on the deal. Last year, Ecuador completed a similar debt-for-nature swap that is expected to generate over $1 billion in savings for the government while protecting the Galapagos Islands. [Extracted from the article]