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Laxman Pai, Opalesque Asia: In 2021, sustainable bonds reached $1trn, growth spearheaded by green bond issuance. This represents a 20-fold rise from 2015 and accounts for 10 percent of global debt markets, said a study.
"Sustainable bond issuance is now more than 20-times the size of 2015 and accounts for one-tenth of global debt capital markets. Meanwhile, sustainability-linked loans, which looked like they had been left behind for much of 2020, came of age in 2021, tripling their previous record to hit $717bn," said a report by Refinitiv.
The report explained that sustainable finance bond issuance in 2021 smashed the previous all-time record set the year before, rising 45 percent to $1trn. An 11 percent retraction in the final three months of the year did not prevent Q4 from staying north of $200bn raised from 400 issuances. The activity was driven largely by the green bond and social bond sub-categories.
The astonishing ascent of green bonds during 2020 turned out to be just a staging ground for 2021, which nearly doubled the previous year to reach a record $489bn. The market plateaued in Q4 at a sky-high $120bn.
More than a thousand green bonds were issued during 2021, a record and a 54 percent increase on the prior year. It will be interesting to see whether this level of activity is durable beyond the past two exceptional years, into 2022 and beyond, said the report. Such durability looks to be in some doubt for social bonds at least.
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