ESG Debt Concerns Revealed by Watchdog Urging Rapid Fix (1)

The unfettered boom in ESG debt has created some accounting concerns that are in urgent need of regulatory attention, according to Europe’s markets watchdog.

Firms are booking the value of so-called sustainability-linked bonds and loans in inconsistent ways, the European Securities and Markets Authority has found. The development has the potential to “negatively affect the decision-making of financial market participants and thus the efficient functioning of capital markets,” ESMA told Bloomberg in an emailed response to questions.

Demand for such debt products has soared in recent years and Moody’s ESG Solutions expects the ESG bond market alone to hit about ...