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Deforestation exposure: Q1 2024 bond issuance review and bank syndication fees

Written by Josephine Richardson & Johan Jarnmo

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In this note we review issuances from the Representative Deforestation Credit Portfolio (RDCP) in Q1 2024. This shows how benchmark exposure may have changed over the last quarter and provides insights that may help investors concerned about deforestation better target their sustainability engagements with banks.

In December 2023, AFII introduced its Representative Deforestation Credit Portfolio (RDCP), a universe of credits with potential exposure to deforestation, to support investors in achieving their sustainability objectives.

In Q1 2024 there were $19bn of bonds issued within this universe. Issuance in USD was average, whereas issuance in EUR was above average compared to overall market activity. This suggests benchmark EUR investors may have increased exposure to deforestation risks.

Tracking syndication fees from these transactions offers an opportunity to identify engagement targets amongst banks. With this data, investors can direct their business to institutions more aligned with their sustainability objectives. 

About the authors

Josephine Richardson

Josephine Richardson

Managing Director, Head of Research

Based in London, Jo leads AFII’s research and a global team supporting fixed income investors as they align their portfolios with climate and sustainability goals. She joined AFII after 18 years in fixed income markets at JPMorgan.

Johan Jarnmo

Johan Jarnmo

Associate Director, Portfolio Strategy

Johan develops tools and analytics that help fixed income investors invest in a climate- and nature-positive way, including AFII’s portfolio tools Co₂liseum and FIONA. He previously worked in Deloitte’s Risk Advisory practice.

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