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Laxman Pai, Opalesque Asia: Sustainable bond volumes are set to surge again this year, with issuance of green, social, sustainability (GSS), and sustainability-linked bonds (SLBs) expected to hit $1.35 trillion in 2022, a 36% increase over the estimated $992bn issued in 2021.
According to a new report released today by Moody's ESG Solutions, 2021 marked another record year for sustainable bonds, with issuance growing 64% year-over-year to nearly $1 trillion.
The total will comprise approximately $775 billion of green bonds, $150 billion of social bonds, $225 billion of sustainability bonds, and $200 billion of sustainability-linked bonds (SLBs).
"Our projections reflect expectations of gradually declining growth rates as the market matures and potential headwinds from monetary policy tightening. Still, GSSS bonds will continue to rise as a share of global bond issuance, potentially reaching 15% of the total in 2022," said the report.
"While we expect continued strong growth in use-of-proceeds green and sustainability bond issuance in 2022 at 48% and 25%, respectively, we anticipate use-of-proceeds social bond issuance will decline around 25% compared with last year as COVID-19 pandemic-related financings largely retreat. We anticipate sustainability-linked bond issuance will more than double in 2022 to $200 billion after a breakout year in 2021 when issuance surged to $90 billion from $9 billion in 2020," it added.
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