Finance - October 5, 2020
Green bond issuance reached $1 trillion milestone after record month
Green bond issuance in the first nine months of 2020 increased 12% based on the same period in 2019, causing the market to pass its milestone of $1 trillion issued since the market first emerged in 2007.
BloombergNEF reported that $200 billion worth of green bonds financing the pursuit of environmental projects and activities were issued in 2020 thus far, while September alone saw the addition of $50 billion in financing brought into the market.
With this milestone, the sustainable debt market, including social bonds, sustainability-linked loans, green loans and others, was brought to more than $2 trillion. In the first nine months of 2020, green bonds accounted for 47% of the sustainable debt issued worldwide.
“For much of this year, green bond issuance has lagged behind 2019. But the bumper month in September, with more than $50 billion issued, offers hope of a possible boom in the last quarter of the year,” Mallory Rutigliano, a sustainable finance analyst at BNEF, said in the report.
These green bonds were issued within a variety of categories, including corporate, government and municipal. Germany contributed a large part to the boost that happened in September when the federal government issued a 6.5 billion-euro ($7.7 billion) sovereign bond at the start of the month, the largest single new green bond this year. The Swedish government and Électricité de France (EDF) also contributed more than $5 billion combined.
“The integration of environmental, social and governance criteria has never been more important for investors than in 2020,” Maia Godemer, a BNEF sustainable finance associate, stated. “We’ve seen this reflected in the debt market, and it is not only likely that these varieties of financing will grow in volumes in coming years, but we will see further innovation. One driver is likely to be increasing pressure to standardize rules around green bonds, particularly in Europe.”