Simmons & Simmons’ Post

Delighted to share my first thought leadership piece at Carmignac : 'CLOs- the new frontier of ESG integration in fixed income markets'. Starting as a niche asset, Collateralized Loan Obligations (CLOs), are now a prominent fixture in the fixed income markets, offering attractive yields to investors. In this piece, we are looking at how CLOs can play a role in strengthening the sustainability profile of a fixed income portfolio. Link to the article is in the comments #CLOs' #SustainableFinance, #sustainabledebt, #FixedIncomeMarkets, #ESG

In this article for New Private Markets, partner Paul Barker discusses voluntary and regulatory developments in carbon markets, including considerations for managers deciding what role carbon credits will play in the return profiles of their funds.

🚨 Exciting developments in the carbon market! Check out this article on a new CO2 finance offering by Carbonaires, UBS Investment Bank and The Carbon Removers. Initiatives like these are crucial in advancing scalable and transparent solutions for carbon removal and the fight against climate change. 🌍 🔗https://lnkd.in/ekRhp4qi It’s inspiring to see the financial sector and carbon market innovators collaborate to drive impact. What are your thoughts on this approach?

𝘼 𝙉𝙚𝙬 𝘿𝙖𝙬𝙣 𝙛𝙤𝙧 𝘾𝙖𝙧𝙗𝙤𝙣 𝙈𝙖𝙧𝙠𝙚𝙩𝙨: 𝙏𝙝𝙚 𝙎𝙏𝘼𝘾 𝙍𝙚𝙫𝙤𝙡𝙪𝙩𝙞𝙤𝙣 The carbon market is evolving, and so should our strategies for achieving net-zero emissions. 🌍 Jim Bunch, ex-Goldman Sachs MD, has joined forces with Linklaters and Scope 3 Climate Capital to introduce a groundbreaking alternative to carbon credits: 𝐒𝐞𝐜𝐭𝐨𝐫-𝐓𝐫𝐚𝐧𝐬𝐢𝐭𝐢𝐨𝐧 𝐀𝐜𝐜𝐞𝐥𝐞𝐫𝐚𝐭𝐢𝐨𝐧 𝐂𝐨𝐧𝐭𝐫𝐚𝐜𝐭𝐬 (𝐒𝐓𝐀𝐂𝐬). 𝐖𝐡𝐚𝐭 𝐚𝐫𝐞 𝐒𝐓𝐀𝐂𝐬? Unlike traditional carbon credits that offset emissions by financing environmental projects, STACs directly incentivize suppliers to cut emissions within corporate supply chains. Here’s how it works: 𝐃𝐢𝐫𝐞𝐜𝐭 𝐓𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧: A company places funds into escrow accounts, released to suppliers upon meeting specific climate milestones. 𝐂𝐨𝐥𝐥𝐚𝐭𝐞𝐫𝐚𝐥 𝐔𝐬𝐞: STAC certificates can be used as collateral with banks, enhancing their financial flexibility. 𝑾𝒉𝒚 𝑵𝒐𝒘? 𝐈𝐧𝐜𝐫𝐞𝐚𝐬𝐞𝐝 𝐃𝐚𝐭𝐚: New disclosure regulations provide more transparency. 𝐈𝐦𝐩𝐫𝐨𝐯𝐞𝐝 𝐓𝐞𝐜𝐡𝐧𝐨𝐥𝐨𝐠𝐲: Advancements make emissions reductions more feasible. 𝐓𝐡𝐞 𝐁𝐢𝐠𝐠𝐞𝐫 𝐏𝐢𝐜𝐭𝐮𝐫𝐞: With a shrinking voluntary carbon market and rising concerns over greenwashing, STACs offer a robust, transparent alternative. They're designed to integrate into established frameworks like the Greenhouse Gas Protocol and the Science Based Targets initiative, potentially becoming a cornerstone of the transition finance market. 𝐊𝐞𝐲 𝐓𝐚𝐤𝐞𝐚𝐰𝐚𝐲: As regulatory bodies like the US Treasury and Commodity Futures Trading Commission push for greater market confidence, STACs stand out as a high-integrity solution for decarbonizing supply chains. 𝐏.𝐒. Do you believe STACs could revolutionize the way companies achieve their climate goals? Comment below with your thoughts! #CarbonMarkets #SustainableFinance #NetZero #ClimateAction #ESG #SupplyChain https://lnkd.in/gXANqjrn

The era of historically low interest rates has come to an end in most major markets. How did the rapid rise in the cost of debt impact Supply Chain Finance? Alistair Baxter, Executive Director, Working Capital Finance at Pemberton Asset Management joined a group of senior industry experts to share his thoughts with Jacob Atkins from Global Trade Review (GTR) on market opportunities, relevance of ESG, and how it’s an attractive opportunity for investors seeking yield without locking their capital for extended periods. Read the full article here: https://lnkd.in/difMXekd #AssetManagement #PrivateCredit #TradeFinance #WorkingCapital

On 10 April, the FCA published a consultation paper that set out proposed amendments to its inducement rules relating to research, with an aim to provide UK asset managers with greater flexibility in how they pay for investment research. In this alert we provide an overview and our thoughts: https://okt.to/wczJY2

The FCA is proposing to relax its prohibition on bundled payments of investment research and execution services - but with caution, in the form of “guardrail” requirements to protect end-investors. A good example of the balancing act to be struck between the regulator’s consumer protection and competition objectives - read our article below for our take on the proposals!

Schroders and Baillie Gifford make deadline day moves for SDR labels. Baillie Gifford and Schroders have become the latest asset managers to adopt one of the Financial Conduct Authority’s Sustainability Disclosure Requirements (SDR) labels. Anna O'Donoghue, MBA, James Budden. Check out Linus Uhlig's latest article 👇 https://incm.pub/4fSCv6O #investment #wealthmanagement #assetmanagement #finance

#ESG making strides in the private credit market, about 16% of the $156 billion raised by private credit funds last year went into ESG products, the largest share since 2014. Its exciting too see IEN member, Lombard Odier Investment Managers take advantage of this opportunity by focusing on smaller green loans to mid-sized firms. Their Sustainable Private Credit Fund, launched in July 2022, aims to manage up to US$500 million in assets, targeting a net annual return of approximately 12%. https://bloom.bg/3Lt1lwj #ESG #SustainableInvesting #PrivateCredit #Finance

UBS Asset Management has introduced the UBS European Physical Carbon ETC, offering investors access to the EU carbon market and exposure to EU emissions allowances. With a 0.75% TER, this ETC allows trading in both sterling and euro. By purchasing these credits, investors contribute to reducing industrial pollution by driving up the price of carbon allowances and encouraging companies to adopt lower emission practices. This innovative product is listed on XETRA and soon on the London Stock Exchange. #CarbonCredits #SustainableInvesting #UBSAM #ClimateAction