Global issuance of green, social and sustainability bonds – or sustainable bonds, collectively – is expected to hit $850 billion in 2021, a new annual record and a 59 percent jump from 2020, Moody's Investors Service said in a report Thursday.
Global issuance of sustainable bonds in the second quarter jumped 66 percent from a year earlier to $189 billion, the ratings agency said. This consisted of $94 billion of green bonds, $46 billion of social bonds and a quarterly record $49 billion of sustainability bonds. The quarterly issuance total was the third-highest on record, indicating that market momentum is still exceptionally strong.
"Following record first-half issuance, we now forecast about $450 billion of green bonds and $200 billion each of social bonds and sustainability bonds this year," said Matthew Kuchtyak, Assistant Vice President-Analyst at Moody's.
"We still expect sustainable bonds to account for around 8-10 percent of global debt issuance in 2021, as issuers across all segments of the market continue to explore how they can link their capital markets activities with their sustainability objectives."
Sustainability-linked bond and loan volumes also continue to surge. After a quarterly record of $31 billion in the second quarter, sustainability-linked bond volumes could top $100 billion in 2021, which would bring overall sustainable bond volumes near $1 trillion for the full year, said Moody’s.
According to the Global Impact Investing Network, the COVID-19 pandemic fueled total impact investment--ones that have measurable environmental and social impact--to more than $700 billion last year from $500 billion in 2019.
Global assets focused on environment, social and governance criteria are set to top $53 trillion by 2025, according to a Bloomberg Intelligence report.
(Writing by Brinda Darasha; editing by Daniel Luiz)
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