Rules for sustainability assessments and transition lending advanced this week. The UK finalised regulation of ESG rating providers, while international loan associations set principles for decarbonisation projects outside conventional green categories.

Financing spanned digital infrastructure and sovereign climate investment: PDG secured $1.3 billion for Johor data centres, while AFC and GCF launched a $690 million facility blending concessional and commercial capital for four African countries.

1. FCA finalises rules bringing ESG rating providers under UK supervision

The UK Financial Conduct Authority (FCA) published final rules for ESG rating providers on 3 November, covering transparency, governance, systems and controls, conflicts of interest, and engagement with users and rated entities. Authorisation applications begin on 24 June 2027, with staggered application periods. The regime takes effect on 29 June 2028, when providers will need authorisation and the relevant permission unless an exclusion applies.

The market includes MSCI, Morningstar Sustainalytics, ISS and S&P Global, identified among the most-used suppliers in an International Capital Market Association investor survey. FCA research published in December 2025 estimated that 5,400 UK financial-services firms used externally produced ESG ratings, while 48% of users reported transparency difficulties, including understanding ratings’ objectives, methodologies or underlying data. The rules address those production and disclosure processes without prescribing a common sustainability methodology. Investors will therefore still need to understand why providers’ assessments differ.

2. APLMA, LMA and LSTA finalise principles for transition-labelled loans

The Asia Pacific Loan Market Association (APLMA), Loan Market Association (LMA) and Loan Syndications and Trading Association (LSTA) published final Transition Loan Principles and accompanying guidance on 3 November. The framework covers loans whose proceeds finance eligible decarbonisation projects outside conventional green-loan categories. The guidance addresses borrowers’ transition strategies, project eligibility, the risk of prolonging reliance on high-emitting assets, and external review.

The principles build on the associations’ October 2025 Transition Loans Guide, developed with a global taskforce of more than 60 institutions to address fragmented taxonomies, unclear definitions and verification challenges. Asia-Pacific accounted for close to 80% of global labelled transition-loan issuance during 2021–2024, according to research by the Hong Kong Institute for Monetary and Financial Research. Finalising the framework gives lenders a common basis for assessing projects in high-emitting sectors, where financing must support credible emissions reductions without extending dependence on carbon-intensive assets.

3. PDG secures $1.3 billion green financing for Johor data centre campus

Princeton Digital Group (PDG) announced on 4 November that it had secured approximately $1.3 billion in green financing for the continued development and expansion of its 200 MW JH1 data centre campus in Johor, Malaysia. Affin Bank, HSBC, Maybank, OCBC, Standard Chartered and UOB underwrote the financing, structured under PDG’s Green Finance Framework. Designed for high-density AI and cloud workloads, the campus has achieved Green Building Index Gold for Design and LEED Gold for Operations certifications.

The deal sits at the intersection of growing demand for AI computing capacity and Malaysia’s efforts to manage the sector’s resource requirements. Data-centre and cloud-computing projects accounted for MYR 95.8 billion ($23.7 billion), almost 44% of Malaysia’s approved investments in the first half of 2026, according to MIDA. Its Data Centre Task Force assesses projects against secured power and water supplies and green compliance. JH1’s financing has expanded alongside this investment growth, following a $280 million first-phase green loan in 2024 and an expansion in 2025, with the underwriting group growing from three banks initially to six.

4. AFC and GCF launch $690 million sovereign climate facility for four African countries

Africa Finance Corporation (AFC) and the Green Climate Fund (GCF) launched the $690 million Africa Sovereign Climate Facility on 30 October for Angola, Benin, Côte d’Ivoire and Nigeria. The package combines approximately $280 million in GCF concessional loans and grants, up to $260 million in AFC commercial lending, and $150 million in planned third-party concessional financing for Côte d’Ivoire. Loans will pass through finance ministries to support clean energy, food and water security, and climate-resilient infrastructure, while grants fund project preparation and institutional capacity.

Under the funding proposal, GCF’s lending terms vary by country: Angola and Benin receive 40-year, interest-free loans with ten-year grace periods, while Côte d’Ivoire and Nigeria receive 20-year loans at 0.75%, with five-year grace periods. AFC’s commercial loans run for seven years in Angola, Benin and Nigeria, and ten years in Côte d’Ivoire, with rates linked to SOFR or Euribor. The structure combines concessional funding tailored to each country with shorter-term commercial lending, while grants support the preparation and management of climate investments.

5. UNEP puts annual adaptation needs at $305 billion by 2035

On 4 November, the United Nations Environment Programme (UNEP) released its 2026 Adaptation Gap Report, estimating developing countries’ adaptation needs at about $305 billion annually by 2035. International public adaptation finance from developed to developing countries reached $28.2–31.7 billion in 2024, an increase of just $1 billion over 2023. Even achieving the COP30 aspiration to triple adaptation finance by 2035 would cover only 20%–29% of estimated needs after inflation.

Flows to least developed countries and small island developing states have declined from a 2022 peak, although they increased in real terms over 2019–2024. UNEP identified coordination, institutional capacity and mechanisms for mobilising and managing climate finance as priorities for translating funding into implemented projects. Its central needs estimate largely excludes the private sector’s own adaptation requirements, which could almost double the figure. The report therefore identifies constraints in both the supply of finance and countries’ capacity to deploy it.

6. China plans green sovereign bond issuance of up to CNY 4 billion in Canada

On 5 November, China’s Ministry of Finance announced that, with State Council approval, it would issue renminbi-denominated green sovereign bonds in Canada during the week of 9 November, with a size of no more than CNY 4 billion ($599.8 million). Specific issuance arrangements will be announced before the offering. The planned sale brings China’s offshore green sovereign funding programme to the Canadian market.

The announcement follows a CNY 6 billion ($899.8 million) green sovereign bond issuance in Hong Kong in May, which attracted subscriptions equivalent to 10.4 times the issue size, according to the ministry’s fiscal policy report. The Canadian offering extends the programme’s geographical reach and provides a further channel for offshore renminbi investment. The Hong Kong transaction supplies a precedent for investor demand, while the forthcoming Canadian terms and order book will show how the programme is received in another market.

7. JBIC establishes $600 million transition financing facility for Petronas

Japan Bank for International Cooperation (JBIC) signed an agreement with Petronas on 4 November establishing a credit line of up to $600 million, including up to $360 million from JBIC. The facility, established under its GREEN environmental financing operations, will support decarbonisation and energy-transition projects undertaken by Petronas or its subsidiaries in Malaysia and overseas.

The facility builds on JBIC and Petronas’ earlier cooperation on renewable energy, carbon capture and storage, and biofuels under the Asia Zero Emission Community initiative. Signed during the second Japan–Malaysia CCS Dialogue, the agreement provides a financing channel for that cooperation. JBIC said it also aims to create opportunities for Japanese companies to work with Petronas, linking its environmental financing mandate with support for Japanese business overseas.

8. HKMC completes infrastructure securitisation with $128.5 million sustainability tranche

On 30 October, the Hong Kong Mortgage Corporation (HKMC) announced completion of Bauhinia 4, an infrastructure loan-backed securitisation with $457.3 million of issued notes. The transaction includes a $128.5 million sustainability tranche backed by sustainable, green and social assets. Its underlying portfolio comprises 42 debt obligations across 32 projects in 15 countries, with a total value of approximately $481.5 million.

Bauhinia 4 follows three issuances between 2023 and 2025, with some underlying assets drawn from Bauhinia 1 following its redemption. HKMC added an unrated Class D tranche in response to demand for mezzanine exposure, expanding the transaction to five note classes. Standard Chartered acted as sole global coordinator, and the Asian Infrastructure Investment Bank continued as an anchor investor. HKMC remains sponsor, collateral manager and risk-retention holder. The sustainability tranche follows its Social, Green and Sustainability Financing Framework.

9. BBVA raises CHF 390 million through green bonds in Switzerland

BBVA placed CHF 390 million ($476.8 million) of senior preferred green bonds in the Swiss market on 3 November. The issuance comprised CHF 205 million ($250.6 million) maturing in 2030 and CHF 185 million ($226.2 million) maturing in 2033, priced at 78 and 93 basis points over SARON mid-swap respectively. UBS and Commerzbank acted as joint bookrunners. BBVA said the issuance would strengthen eligible liabilities supporting its minimum requirement for own funds and eligible liabilities (MREL).

BBVA’s Sustainable Debt Financing Framework provides for allocating an amount equivalent to proceeds to eligible financing and refinancing, with categories including renewable energy, energy efficiency and sustainable water management. Allocation and environmental impacts are reported under the framework. The bank has previously issued green senior preferred bonds in Swiss francs, including a two-tranche transaction in 2022. The latest sale continues that funding channel while contributing to its regulatory liability requirements.

10. OCBC links CHF 100 million DKSH loan to emissions targets

On 3 November, OCBC announced a five-year CHF 100 million ($122.3 million) sustainability-linked loan to DKSH, the Swiss market expansion services group. As sole lender and sustainability adviser, OCBC structured annual performance targets aligned with DKSH’s Science Based Targets initiative-validated commitments. The financing is DKSH’s first to incorporate a Scope 3 emissions intensity target. Proceeds support general corporate purposes and growth opportunities.

DKSH’s commitments include reducing absolute Scope 1 and 2 emissions by 71.2% by 2030 from 2020, and Scope 3 emissions from purchased goods and services per Swiss franc of value added by 61.1% by 2033 from 2024. Scope 3 emissions account for more than 70% of its overall footprint, extending the loan’s incentives beyond direct operations. Meeting or exceeding annual targets may reduce financing costs. The announcement did not specify the size of the adjustment.