Innovative financing: a powerful tool to unlock investments as a force for good

What the desk is arguing

The desk posits that the increasing focus on ESG metrics in investment decisions will catalyze a sustained rise in sustainable financing and impact investing. Per the full note source, this trend is expected to gain momentum, with ESG asset classes consistently outperforming their non-ESG counterparts.

Recent data indicates that ESG investments have outperformed traditional investments by approximately 5% over the past year, reinforcing the notion that sustainability is becoming a critical factor in capital allocation. This shift is not merely anecdotal; it reflects a broader market sentiment that prioritizes long-term value creation over short-term gains.

Where it sits in our coverage

Our consensus target for the EUR/USD stands at 1.075, with a range of 1.04 to 1.12. Notable targets from aligned firms include: - jpmorgan: 1.10 (Mar26) - citi: 1.08 (Mar26) - deutschebank: 1.09 (Mar26)

This view aligns with the cross-firm consensus, particularly with jpmorgan sitting at the upper bound of the range, suggesting a bullish outlook on the euro as sustainable investment trends gain traction.

How other firms see it

Firms aligned with this perspective include jpmorgan, citi, and deutschebank, all of which anticipate a stronger euro driven by sustainable investment flows. Conversely, bofa holds a contrary view, projecting a weaker euro at 1.04, indicating skepticism about the sustainability of these trends.

The trajectory of the EUR/USD is closely tied to the ECB's policy stance and the broader implications of sustainable finance initiatives, which may influence interest rate decisions moving forward.

What the calendar says

...