In 2022, we expect a greater volume of green finance and sustainability-linked loans as banks continue to deliver on their core values and sustainability commitment. The legislative environment also continues to evolve with the EU introducing numerous legislative initiatives including the EU Taxonomy Climate Delegated Act which sets out technical screening criteria for disclosures required under the EU Taxonomy Regulation. This will help lenders and borrowers assess whether a financial product meets the necessary hallmarks to be considered "sustainable financing" and, together with the Green Bond Standard, should assist with the harmonisation of the green loan and green bond markets across Europe. The main requirements under Sustainable Finance Disclosure Regulation (SFDR) are also due to apply from 1 July 2022 and will harmonise disclosure of how ESG factors are adopted by industry participants in their decision making process. As such, ESG and social impact investing is set to be at the heart of economic recovery from the pandemic.
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