Investors and issuers diverge on clean power generation

Canadian issuers and investors are both interested in sustainability but have different ideas of how to transition to clean power technology.

According to a new survey by HSBC Bank Canada, 98% of Canadian issuers are factoring sustainability into their business activities. Of the largest companies surveyed, 30% reported they are on track to reach full sustainability, including net zero carbon emissions.

Both issuers and investors viewed infrastructure projects — such as energy-efficient buildings, sustainable public transportation and renewable energy sources — as the most attractive sustainable investment opportunities.

But when it came to clean power, issuers and investors’ opinions diverged considerably.

Solar power generation was the most attractive investment opportunity among issuers, with a blended score of 12.6 out of a possible 17. Solar power was the least attractive opportunity, however, among investors, with a blended score of 2.8.

Investors gave their highest blended score — 6.8 — to hydrogen power investments, but issuers gave hydrogen a blended score of only 0.3.

While issuers and investors are both interested in environmental concerns, neither group was overly interested in social issues, the survey noted.

“Looking ahead, despite the Covid-19 pandemic, social issues do not yet appear to have gained as much focus,” Dan Leslie, senior vice-president and deputy head of commercial banking with HSBC Bank Canada, said in a release. “As environmental initiatives are gaining steam, the next stage for Canadian market participants is likely to be devoting more attention to social issues in their financing and investing approaches.”

HSBC commissioned GlobalCapital, a capital markets newspaper, and Euromoney Data to survey 91 issuers and 91 investors in Canada in September 2020. For further details, see HSBC’s survey.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.