Finance

What to expect for sustainable finance in 2024

Published

2 years ago

February 9, 2024

What to expect for sustainable finance in 2024

Geopolitical changes are predicted to have a big impact on the growth of green finance in 2024 but, while some markets may experience a setback, others are predicted to grow
In order to ramp up the volume of investments in green and other sustainable projects, transparency, scrutiny and accessibility remain paramount
New and improved regulatory frameworks can help prevent greenwashing, and make the market more attractive for investors

2023 wasn’t exactly a stellar year for some segments of the sustainable finance market. According to Bloomberg New Energy Finance, global sustainable finance issuance volumes reached $1.3tn last year, down from $1.55tn in 2022 and down on the $1.8tn peak seen in 2021.

While green bond issuance saw an 11 per cent increase year on year in 2023, according to ING’s Sustainable Finance Pulse, sustainability-linked bond issuance fell 24 per cent and sustainability-linked loan issuance fell 55 per cent.

“It’s clear that the markets have seen two years of total volume decline and, at the start of the year, a lot of people were still quite positive that 2023 would bring growth — well, that didn’t happen and we’ve seen that reflected also in sustainability-linked products,” says Jacomijn Vels, global head of sustainable finance at ING.

ING attributes last year’s faltering demand for sustainable finance debt to investors reassessing the market, greenwashing concerns and the need for greater regulatory clarity. While demand for sustainable finance products remains strong, ING says investors and lenders will continue to seek out “higher quality” structures.

ING researchers forecast global ESG bond supply of €820bn this year, compared to an estimated €815bn for the end of last year, with 40 per cent of total issuance expected to be in euros.

However, Vels says it is not easy to predict where the sustainable finance markets will go in 2024. “American elections are more likely to be a negative than a positive for sustainable financing. The nearer you get to the elections, the more corporate clients are going to think about what the anti-ESG sentiment might do to issuing debt. That’s the region I’m most uncertain about.”

In the US, Donald Trump has added his voice to Republicans condemning ESG investment, which is expected to be a major election issue in the run-up to the presidential race later this year. The FT reported last year that at least 49 “anti-ESG” bills were introduced across the US and investors such as BlackRock have been accused of not honouring their fiduciary duty by applying ESG to their investment decisions.

Nick Robins, professor in practice for sustainable finance at the London School of Economics, says the ESG backlash, which succeeded, in part, in steering firms away from investing their funds in sustainable projects for fear it would deliver fewer returns, has had an impact in some regions more than others. “Within the financial realm, green finance is no more a sort of pure technical matter, but a highly politicised topic within the market, especially in jurisdictions like the US,” he says.

Underpinning the ESG backlash is this debate as to whether investment managers and other institutional investors are permitted or even required to consider ESG issues when discharging their duties to their end clients or beneficiaries. Many critics believe ESG investing goes against managers’ main duty, which is to make money for investors.

Robins says the US presidential elections bring a level of uncertainty in the direction the US will take with regards to regulation and whether local institutions still have the “courage” to continue making sustainability-linked investments.

Emerging economies a bright spot

However, there is positive growth momentum in other parts of the world. In the Asia-Pacific region, ING still expects to see healthy growth. Last year, the bank hired sustainable finance experts in Australia and South Korea with the view to growing its business in the area. “We’re seeing the traction start to come up in Apac,” says Vels, adding that Asia is a difficult region given the issues it faces in terms of the green transition.

Many Asian economies are still heavily reliant on fossil fuels and are not expected to transition as quickly to net zero as other regions such as Europe where regulation and investment is more aligned with ‘greening’ the economy.

This year, Robins foresees an increase in the volume of investments in so-called emerging economies. “2023 was the year in which sustainable finance and green finance really landed in India, and I believe that the trend will continue this year. Also in Brazil, which in many ways has been a real pioneer in these sectors of the market, we expect to see more growth in 2024.”

Transparency and accessibility

To meet the goals set out by the Paris Agreement, aimed at containing global warming to below a 1.5C rise since pre-industrial levels, companies across sectors need to scale up their efforts to decarbonise their business. Green finance plays an important role in the transition, but certain structures such as green loans haven’t always been as popular with investors compared to sustainability-linked loans.

Historically, green loans haven’t proliferated because a lot of borrowers didn’t want to be restricted in the use that they make of the proceeds, says Arash Mojabi, ING’s UK lead for sustainable finance. “They didn’t yet have the kind of financing identified to make it worth doing a separate green loan.”

Greater transparency on the requirements attached to green bonds and loans, and sustainability-linked loans, is fundamental to driving greater investor demand in the market.

Ingrid Holmes, executive director at the Green Finance Institute, says the emergence of green taxonomies, as well as transition plans, is introducing a level of scrutiny around green claims from clients and from financial institutions, which will drive up quality, but also build a better understanding of what actually needs to be financed.

“Banks have done a good job integrating climate into their risk management systems, but their focus now needs to shift to how to better create green deals, because the finance system is only going to be as green as the economy is,” she says.

Corporate investors may ask why they can’t just opt for a ‘plain vanilla’ loan, rather than having to undertake the effort needed for a sustainability-linked loan, which must be clearly tied to verifiable and robust key performance indicators.

However, Mojabi says that on the sustainability-linked side, clients have set 2030 targets, so it is about holding them accountable. “On the flip side, we’ve made a long-term commitment to be net zero by 2050, so our portfolios have to transition. We need to quickly understand who’s on that path with us, because the most disruptive thing would be to have to sell swathes of our portfolio to meet those targets.”

How is regulation impacting green finance?

In spite of the huge steps forward that have been made in green finance, the risk of greenwashing remains a concern for clients, financial institutions and regulators alike. Last year, the European parliament approved voluntary standards for companies wanting to use the “European green bond label”. As Sustainable Views reported, the standards require issuers to disclose “considerable information” on use of proceeds with at least 85 per cent of these being allocated to activities covered by the EU sustainable finance taxonomy.

Last year’s release of the sustainability-linked loan principles also helped the market by providing direction on what you should do to make sure you have ambitious and relevant KPIs, says Vels of ING. “It also provides the guidance that you need to have them [KPIs] checked and validated externally for all borrowers. That has actually helped in structuring sustainable loans.”

The introduction of regulations like the EU’s Corporate Sustainability Reporting Directive should allow banks to more transparently engage with their clients on KPIs, she adds. “This transparency hopefully will also bring us more intelligence in terms of what capex [capital expenditure] is necessary for our clients to fund the transition. In the end, regulation will help us grow the market and, hopefully, also our clients in knowing where to invest.”

But Vels says regulation should not just be about disclosure, but also provide tools to stimulate investment in the transition. “My fear is that the regulation on the disclosure side will grow and we won’t get the stimulus next to it,” she says.

Finance

How Applied Materials Is Driving Transformation of the Finance Function with SAP Taulia

Published

7 hours ago

June 4, 2026

Press Room

How Applied Materials Is Driving Transformation of the Finance Function with SAP Taulia

Within the global manufacturing industry, maintaining a competitive edge requires a delicate balance between driving internal efficiency and fostering strong external relationships. For Applied Materials, a leader in materials engineering solutions for the semiconductor industry, this challenge became the foundation for a strategic finance transformation program, with an SAP Taulia solution emerging as a key enabler.

The journey began in early 2019 with the launch of Agile Finance, an end-to-end transformation initiative designed to support the company’s aggressive growth trajectory, which included a goal to double in size. The initiative was built around three strategic pillars: enhancing the efficiency and effectiveness of the finance organization, promoting career fulfillment, and establishing a robust digital operating model. The impact was significant, with the finance function achieving approximately 35% productivity gains in its labor force.

The third pillar—the move to a digital operating model—is where the partnership with SAP Taulia began.

“The SAP Taulia Dynamic Discounting solution was introduced not merely as a cost-cutting measure, but as a strategic tool to transform and digitize the interaction with Applied’s extensive, global supplier base,” Junaid Ahmed, corporate VP, Finance at Applied Materials, says. “We understood that to reap the benefits of digitization, we had to ensure the suppliers were on board. It needed to be a win-win outcome.”

Unprecedented flexibility for suppliers

The program empowers suppliers—thousands of them worldwide—to self-select which approved invoices they wish to discount for early payment. This is not a continuous, all-or-nothing commitment but rather a decision made on an invoice-by-invoice basis. This flexibility allows suppliers to manage their working capital needs with greater precision, taking advantage of early payment during their own critical periods, such as quarter-end or year-end, to help meet their own financial targets.

The system also drastically improves transactional efficiency. Suppliers no longer have to call Applied to track invoice status, approval, or payment date. All this information is available 24/7 in the SAP Taulia solution, reducing resource allocation on both sides and ensuring both reap the benefits of moving to an integrated, digital system.

Strategic benefits for Applied Materials

For Applied, the program is a testament to its focus on balancing efficiency with strong supplier relationships. The philosophy is a “win-win” built on a crucial spread: Applied Materials, as a Fortune 500 company with strong cash flow, has a significantly lower cost of capital than many of its suppliers. By funding the discounts, Applied captures a return—the discount income—while offering its suppliers funding at a rate close to their cost of capital, but with greater convenience.

This relationship-focused approach is critical. Applied’s supplier account managers actively support the program because they recognize its mutual benefit, not viewing it as a finance mandate to push costs onto the supply base.

Furthermore, the “dynamic” nature of the discount rates is a powerful risk mitigation tool. Unlike fixed contractual discounts, the rates can be adjusted in response to global economic changes, such as shifts in interest rates. When interest rates rose after the pandemic, Applied was able to adjust the discount rates accordingly with minimal pushback, as the core proposition remains the valuable spread between the parties’ cost of capital.

The SAP Taulia Dynamic Discounting solution has been rolled out globally, giving all suppliers the opportunity to use it. This has been critical over the last 12 months as many businesses around the globe have been subject to new and often unexpected tariff costs impacting their margin and their liquidity.

“The flexibility of the solution means suppliers can access funds when they need them, which helps them navigate some of the economic uncertainty that many businesses are facing,” Dirk Holoubek, managing director, Finance Shared Services, explains. “2025 saw a 23% increase in usage of the discounts, reflecting the pressures that suppliers are feeling right now on their cash flow.”

The solution’s capability to drive sophisticated analytics is also a major strategic asset. It helps provide insights into the different costs of capital between Applied and its supplier base. This data allows for targeted outreach and communication, ensuring that the offer of capital support is proactively extended to the suppliers that need it most.

The strategic value of the solution is further cemented by its ownership. The acquisition of Taulia by SAP brings several advantages.

“Trust is really important to both us and our suppliers,” Ahmed says. “For our suppliers to adopt a new solution, they need to know its technology they can rely on in the long term. Being part of SAP creates that assurance in the long-term future of the program.”

Looking forward, Applied Materials is already focused on the next stage of the transformation project: Agile Finance 3.0, which is focused on enabling the organization to become AI-first. The company is deploying a global, organization-wide AI assistant to drive personal productivity, but the strategic application of AI in the supplier management space is even more profound.

AI is expected to transform decision-making enablement by analyzing critical information and communicating effective options. In the future, AI will be able to proactively assess the specific needs and attributes of the supplier base, enabling Applied to address issues more quickly and resolve them earlier. The benefits are already tangible in e-invoicing: AI has made the solution more flexible and “human-like,” capable of reading minor changes in invoice format that would have previously caused electronic errors. This reduced rigidity and increased flexibility are directly contributing to the overall efficiency of the digital operating model.

By leveraging the SAP Taulia Dynamic Discounting solution, Applied Materials has not only digitized a process but also strategically transformed its financial operations, creating a system that is agile, resilient, and focused on maintaining mutually beneficial relationships with its global supplier ecosystem.

Cedric Bru is CEO of SAP Taulia.

Finance

Houston budget amendment would give financial assistance to help those impacted by a trash fee

Published

17 hours ago

June 3, 2026

Press Room

Houston budget amendment would give financial assistance to help those impacted by a trash fee

HOUSTON, Texas (KTRK) — Houston City Council could soon consider whether to offer financial assistance to help those who may struggle to afford a proposed trash fee.

This month, council will approve a budget. In it, Mayor John Whitmire doesn’t increase taxes.

However, he does want to charge a $5 monthly fee to cover trash services. A plan to help close the city’s nearly $200 million deficit that doesn’t add up to some.

Speaking in front of council on Wednesday, Super Neighborhood 64 president Lindsay Williams brought more than concerns, she had numbers surrounding the mayor’s proposed $5 monthly trash fee.

A plan his team says could climb to $25 a month by 2032. If it does, Williams told council that $300 annual cost would be just .15% of a $200,000 income.

For someone making $15,000, it’s two percent. “More than 13 times the burden for the same trash, same truck and same fee, but not the same pay,” Williams explained.

However, Controller Chris Hollins said the mayor’s not being truthful about the real cost.

“Houstonians are not stupid,” Hollins said. “We should not treat Houstonians like they’re stupid.”

Hollins said the cost may need to be $40 a month. Whitmire didn’t respond to Hollins during the meeting when he asked if he plans to increase the fee.

No matter the cost, some council members want to offer financial relief. Right now, there are no exceptions.

However, an amendment council will consider from Council Member Alejandra Salinas next week would change that.

“If they for whatever reason met the threshold and need an additional need because of the administrative fee, our amendment would allow them to apply for funds through the water fund,” Salinas said.

The trash fee wasn’t the only item from the mayor’s seven and a half billion dollar budget proposal that sparked debate. Hollins said a plan to divert money away from water utilities could drain a billion over the next five years from infrastructure money.

Whitmire disagrees saying there’s more than enough funds to handle the change, and continue with projects.

“We’ve all admitted the budget’s not perfect, but certainly it’s a first start that Houstonians understand and it’s a shame it’s being so politicized because it’s literally people’s lives and death,” Whitmire said.

Council will vote on amendments next week. It has to have a new budget in place by the end of the month.

Finance

How can I illustrate our financial position to a spouse who shows little interest?

Published

1 day ago

June 3, 2026

Press Room

How can I illustrate our financial position to a spouse who shows little interest?

Reader question: My spouse has little interest in our financial position. As we age, this concerns me. I try to share some basic information (income, spending, account balances, debt, and so on) each month but rarely get a response. I think graphs or charts might be of more interest to her than a bunch of numbers. What recommendations would you have for illustrating our financial position so that I am not the only person aware of how we are situated? Thanks!

Answer: Your situation is pretty common. Most couples I know develop a division of labor over time, where one person is in charge of financial matters and the other person is less involved. That’s definitely the case for my husband and me. He’s in charge of paying all the monthly bills and preparing our tax returns, but the financial planning and investment decisions are up to me. This type of arrangement might work well for a long time, but can become less sustainable with age, particularly if the “finance person” in the relationship dies or develops a major health issue.

Online tools and mind maps

Illustrating your financial situation with charts and graphs is a great idea that might help your spouse become a little more involved. Morningstar’s  Portfolio X-Ray  tool includes a variety of images that help illustrate your financial situation. Websites for most major brokerage firms also include some visual tools. Schwab, for example, offers a Portfolio Checkup and a bar graph illustrating your account’s monthly income from dividends and interest income. Vanguard has a Portfolio Watch tool and a variety of performance illustrations, tools, and calculators.

A  mind map, which we used with clients when I worked for a financial advisory firm, can be another way to picture your entire financial situation on one page. There are various  softwaretemplates  for drawing a mind map, or you can simply sketch it out with a large sheet of paper and a pencil. Start with your names at the center of the page. Then draw spokes connecting to various categories, such as names of other family members; investment accounts; real estate and other assets, insurance policies, estate plans, key goals and values, and contact information for accountants, estate planners, and other professionals. It can be helpful to go through the mind map together and make any updates needed at least once a year.

Other ways to communicate about money

A few other ideas—though not related to charts and graphs—might also be useful.

I like the idea of putting together a  net worth statement  that itemizes cash, taxable accounts, real estate, retirement accounts, and debt for each member of the couple as well as items owned jointly. It’s a good idea to update this document at least once a year and  discuss it as a couple. If you set up the document as a spreadsheet, you can include columns with additional information such as account numbers, what each account is used for, which accounts are subject to required minimum distributions, or tax issues like potential capital gains.

Many couples also put together a  binder  (sometimes humorously called a “Doomsday Book”) that contains information about where to find important paperwork, insurance policies, how bills are paid, what each account is for, steps the surviving spouse will need to take, final wishes, and any other critical information.

A well-qualified financial adviser can bridge the information gap

Finally, you could consider working with a good  financial adviser,  who can help involve your spouse in financial matters while you’re still living and step in to fully manage investments and personal finance decisions if you pass away before your spouse. Make sure the adviser holds the Certified Financial Planner designation and charges fees that are reasonable. Although a 1% fee is still the industry standard for accounts of $1 million or less, it’s possible to find advisers who charge significantly less, including a few who price their services based on hours worked instead of a percentage of assets under management.

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This article was provided to The Associated Press by Morningstar. For more personal finance content, go to https://www.morningstar.com/personal-finance.

Amy C. Arnott, CFA, is a portfolio strategist for Morningstar and co-host of The Long View podcast.