JSE’s Sustainability Segment gains more traction with more listings in the pipeline

The Johannesburg Stock Exchange (JSE) has been making strides in promoting sustainability and green investments through its Sustainability Segment, which has seen significant growth and interest since its introduction in July. Shameela Soobramoney, the Chief Sustainability Officer at the JSE, highlighted the performance of the segment and the potential it holds for the future. The Sustainability Segment allows the listing of various green bonds, social bonds, and sustainability bonds, enabling companies to raise capital for activities aligned with sustainable development goals. Since the inception of the segment in July, there have been no new listings, but there is a strong indication of a pipeline of new instruments waiting to be introduced. So far, the segment has raised approximately 9.2 billion rand in green bonds alone, showcasing a growing interest in sustainable investments. Investors are becoming increasingly drawn to these types of assets, not only traditional investors but also those specifically interested in sustainability-related outcomes. Soobramoney emphasized that green bonds, social bonds, and sustainability bonds have similar characteristics to conventional bonds but with the added advantage of earmarking funds for projects that contribute to social and environmental objectives. This feature has attracted a diverse range of investors who are keen to support initiatives that align with sustainable practices. Globally, the green bond market is gaining momentum, with expectations of reaching over a trillion dollars in issuance by early next year. The rise in sovereign issuances is particularly noteworthy, as governments are now raising funds for projects that promote sustainability and social welfare. This trend is encouraging more investors to participate in sustainable finance, signaling a shift towards responsible investing. Despite the challenges posed by the current economic crisis, there has been a significant increase in capital raised through green and sustainable bonds, highlighting the growing importance of investing in environmentally and socially conscious projects. Both sovereigns and corporates are utilizing these instruments to fund initiatives that drive positive change in their communities and among stakeholders. While specific details about upcoming listings in the Sustainability Segment remain confidential, Soobramoney mentioned that there is a broad interest from various entities, including the South African government. The government has expressed its intent to issue a green bond, which could pave the way for more sustainable financing opportunities in the country. The JSE has already seen corporate entities, such as the city of Cape Town, Growthpoint Properties, and Netbank, issuing green bonds on the platform. This diverse participation from both municipalities and corporations demonstrates the growing momentum towards sustainable investments in South Africa. With increased awareness and interest in green finance, the JSE's Sustainability Segment is poised to attract more listings and investments in the future, driving positive change and sustainability across various sectors.