Global sustainable bonds see record issuance in January-September 2021

Comes amid strong demand from investors for ESG debt

  
George Washington is seen with printed medical masks on the one Dollar near Euro banknotes in this illustration taken, March 31, 2020.

George Washington is seen with printed medical masks on the one Dollar near Euro banknotes in this illustration taken, March 31, 2020.

REUTERS/Dado Ruvic/Illustration

Global issuance of sustainability bonds surged to a record high in the first nine months of this year, amid demand for investments addressing climate risks and social inequality.

Sustainable finance bond issuance over the period totalled$777.6 billion, Refinitiv data showed, up 57% compared with the same period a year earlier.

"Companies are looking for ways to be more sustainable and to demonstrate that to the market. An ESG bond issuance ticks both those boxes," said Samuel Adams, chief executive officer at Vert Asset Management.

"They can raise capital for their ESG initiatives and highlight their commitment to sustainability to investors in the same go."

Green bonds, where the money targets an environmentally friendly project, saw the highest issuance of $362.1 billion, followed by social bonds at $170.9 billion and sustainability bonds at $143.7 billion, the data showed.

Social bonds look to raise money for projects with positive social outcomes, such as improving health or providing affordable housing. Sustainability bonds are a mixture of green and social bonds.

Environmental, social and governance (ESG) concerns are gaining ground around the world, with borrowers setting up ESG frameworks to transition to greener economies and capitalise on a surge in global awareness of sustainability risks following the COVID-19 pandemic.

Walmart Inc WMT , which announced plans to use 100% renewable energy by 2035 and create zero emissions in its operations by 2040, made its green bond debut with a $2 billion offering last month, the largest ever from a U.S. company.

"Goals like these from large companies around the world require large capital outlays, and with bond rates so low today, the green bond market is an attractive place to finance the necessary investments," said Jonathan Bernstein, director of research at Hefren-Tillotson.

Amazon.com Inc raised $1 billion in May to help it invest in renewable energy, clean transport, greener buildings and affordable housing, while Salesforce 

Credit Agricole, China Development Bank and IsDB Trust Services led this year's sustainable bond issuance among corporates, the data showed.

Leading the banking race to help issuers come to market was U.S. lender JPMorgan, which helped raise $24 billion through green bonds alone, followed by Citi with $20.3 billion and BNP Paribas with $20.1 billion.

BofA Securities took the top spot for social bond issuance with $10.7 billion, followed by JP Morgan with $9.5 billion and Citi with $9.2 billion , the data showed.

(Reporting by Gaurav Dogra, Patturaja Murugaboopathy in Bengaluru; Editing by Bernadette Baum) ((gaurav.dogra@thomsonreuters.com;))


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