There are a number of ways in which repo can potentially contribute towards an overall sustainable finance strategy. On the one hand, more and more firms are starting to integrate sustainability considerations into their existing repo business via a differentiated treatment of collateral and counterparties. On the other hand, the large global capital flows seeking to support green and sustainable activities are catalysing the development of more innovative products in the market. Although we see some common features emerging, the market is still at an early stage with only a limited number of transactions. This paper raises a number of open questions that would require further considerations. However, ICMA believes that there is an important role for repo to play and that existing market standards such as the Principles could be adapted for use in sustainable repos. Along with the Taskforce members, ICMA will continue to closely monitor the market evolution as well as any forthcoming regulations with an aim to encourage standardisation of terminology and sustainability approaches within the repo market.
The full paper is available at https://www.icmagroup.org/assets/ICMA-Sustainability-in-the-repo-market-20221025.pdf