SEB’s The Green Bond report: Can AI support the sustainability transition?
The latest issue of SEB’s The Green Bond report is dedicated to the role of artificial intelligence in accelerating the transition towards a net-zero economy. We think the impact will turn out to be profound, eventually opening the door for a circular production model.
“Significant progress has already been made when it comes to decoupling emission levels from GDP and living standards since the start of the transition,” says Thomas Thygesen, Head of Strategy and Sustainability in SEB Equity Research. “However, while a peak in global emissions appears to be close, global investment in the clean energy transition still falls far short of what is required to eliminate emissions by 2050.”
“Governments in Western economies appear to be politically constrained right now, so we need to find new drivers,” says Thomas Thygesen. “In our view, AI could be such a driver, opening not only for lower emissions without falling living standards, but ultimately over time also for a more broadly sustainable, circular production model for the global economy.”
The report also features an update on the sustainable finance market. During the first five months of 2024, sustainable bonds achieved a record-high market share in Europe and the Nordics, accounting for 6 and 13 per cent of the bond markets in these two regions, respectively. However, overall growth in sustainable finance remains sluggish, with just under USD 650 billion in new sustainable debt transactions between January and May this year.
“As hopes for rapid interest rate cuts have faded, so has the initial spur in global sustainable bond transactions at the start of the year. However, Europe is showing signs of improvements with corporate sector sustainable bond issuance up 20 per cent year-over-year,” says Gregor Vulturius, Lead Scientist and Advisor at Climate & Sustainable Finance at SEB. “We also find that sustainable finance for data-center development has more than tripled year-to-date compared with the whole of last year and we expect it to reach USD 25 billion by the end of 2024.
The report also contains contributions from the Institute of International Finance on AI’s ability to improve sustainability impact analysis, compliance, and innovation, and from stainless steel producer Alleima on its use of AI to enhance R&D efforts. The report also includes an abbreviated version of an SEB research report on AI’s disruptive potential to usher in a paradigm shift from ownership to usership of physical goods and products and a deep-dive into China’s climate policy.
About The Green Bond report
SEB, which together with the World Bank developed the green bond concept in 2007/2008, publishes the research publication The Green Bond 5-6 times a year. It strives to bring readers the latest insight into the world of sustainable finance through various themes. Even though the report covers all kinds of products and developments in the sustainable finance market, we have decided to keep its historic name – The Green Bond – as a tribute to our role as a pioneer of the green bond market. You can find The Green Bond report at sebgroup.com.
For more information, contact:
Lina Apsheva, Climate & Sustainable Finance
+46 70 767 6527
lina.apsheva@seb.se
Press contact:
Niklas Magnusson, Head of Media Relations & External Communication
+46 70 763 8243
niklas.x.magnusson@seb.se
SEB is a leading northern European financial services group with international reach. We exist to positively shape the future with responsible advice and capital, today and for generations to come. By partnering with our customers, we want to be a leading catalyst in the transition to a more sustainable world. In Sweden and the Baltic countries, SEB offers financial advice and a wide range of financial services. In Denmark, Finland, Norway, Germany and the United Kingdom, we have a strong focus on corporate and investment banking based on a full-service offering to corporate and institutional clients. The international nature of SEB's business is reflected in our presence in more than 20 countries worldwide, with around 17,500 employees. At 31 March 2024, the Group's total assets amounted to SEK 4,130bn while assets under management totalled SEK 2,567bn. Read more about SEB at sebgroup.com.