Green bond issuance soared to $185bn in 2019, report reveals
Global green bond issuance last year reached an all-time high in terms of both individual bonds issued and collective value issued, global law firm Linklaters has concluded.
According to Linklaters’ latest annual green bond analysis, based on data from Thompson Reuters, 479 green bonds were issued by companies, governments and financial organisations in 2019, up from 382 in 2018.
The collective value of green bonds issued in 2019 was $185.6bn (£141.7bn), compared to $142.4 (£108.8) the year prior.
Linklaters’ analysis covers all bonds specifically created to fund projects that deliver environmental benefits in terms of emissions, resources, waste or habitats. It has been conducted annually since 2015, when just 11 bonds were issued, at a collective value of $37.4bn (£28.6bn). The world’s first green bonds were notably issued in 2007.
Commenting on the 2019 findings, Linklaters’ capital markets partner Richard O’Callaghan said: “This has been the strongest year yet for green bonds, demonstrating record investor appetite for sustainable investments. 2020 is set to be a bumper year for green bonds around the world as environmental impact becomes an even greater priority for investors.”
O’Callaghan’s echo the findings of several other green bond market analyses made in recent weeks and months.
The Climate Bonds Initiative last week released a new blog claiming that global green bond issuance now stands at more than $773bn (£590.7bn) cumulatively, speculating that the total could surpass the $1trn mark in 2020, despite a slowdown in growth between 2017 and 2019.
Similarly, Moody’s is predicting strong credit quality and further issuance increases in the global green bond sector in 2020. Slow global growth will pose risks, but high-quality cover pools and issuer and sovereign strengths will mitigate risks, Moody’s claims.
Linklaters’ analysis additionally breaks down issuances and turnover by nation, dubbing Sweden 2019’s “green bond hotspot”.
While Sweden’s 4.5% market share pales in comparison to nations like the US (14.5%) and Germany (9.9%), Sweden issued 78 green bonds in 2019, more than any other nation. Sweden has also issued more bonds since 2015 than any other nation (230).
Linklaters attributes this trend to Sweden’s overarching ambitions to become one of the world’s first fossil-free nations and to prioritise welfare and wellbeing over economic growth. These ambitions have helped to shape policy and drive “substantial” green investments from the business sector, the law firm notes.
Looking at 2019 specifically, around 40% of all issuances in terms of both number and value originated from China, the US, France and Germany.
Linklaters is predicting further growth in the French and German green bond markets, and for this growth to broaden across the continent, as the EU’s new taxonomy regulations on green finance come into effect in 2021. The new regulations aim to tackle greenwashing and ensure adequate finance is allocated to meet the aims of the bloc’s Green New Deal, which includes a 2050 net-zero target.
Green finance at edie’s Sustainability Leaders Forum
edie’s Sustainability Leaders Forum returns in 2020, as some of the biggest companies, individuals and organisations championing sustainability gather at the Business Design Centre on 4 & 5 February.
Green finance will be a key discussion point, with speakers including Green Finance Institute CEO Rhian Mari Thomas, M&G Investment's head of responsible investment and ESG Anita McBain and Aviva Investors' global head of governance Mirza Baig.
Other keynote speakers at this flagship, multi-award-winning event features include Mary Robinson, former President of Ireland; Rebecca Marmot, Unilever CSO; Tom Szaky, TerraCycle CEO and Gilbert Ghostine, Firmenich CEO. For details and to register visit:https://event.edie.net/forum/