Sustainable bond issuances to hit record US$1.35 trillion this year, Moody’s ESG Solutions says

The volume of green, social, sustainability and sustainability-linked bonds is projected to grow 36 per cent in 2022

Sustainable bonds will potentially reach 15 per cent of total issuances this year: Moody’s ESG Solutions executive

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New Year’s celebrations in Madrid on January 1 this year. The issuance of sustainability-linked bonds is expected to see the strongest growth, more than doubling in 2022 to US$200 billion. Photo: AP

Published: 6:31pm, 8 Feb 2022Updated: 8:59pm, 8 Feb 2022

Sustainable bond issuances are expected to hit a record US$1.35 trillion globally in 2022, although growth is expected to slow amid a maturing market and monetary tightening, Moody’s ESG Solutions said.

The volume of green, social, sustainability and sustainability-linked (GSSS) bonds was projected to grow 36 per cent this year, slowing from the 64 per cent growth rate seen last year, when the issuance totalled US$992 billion, according to a report by Moody’s ESG Solutions.

Despite the moderation in growth, “sustainable bonds will continue to rise as a share of global bond issuance, potentially reaching 15 per cent of total issuance this year”, Matthew Kuchtyak, vice-president of ESG outreach and research at Moody’s ESG Solutions, said in a statement on Monday evening.

“Our projections take into consideration expectations of gradually declining growth rates over time as the market grows and matures, particularly in more established markets, as well as potential headwinds for overall global debt issuance in 2022 in a potentially tightening monetary policy environment,” Kuchtyak said in the report, which was published on January 31 along with analyst Erika Bruce.

As the number of issuers embedding sustainability strategies into their capital market plans remains on an upwards trajectory, GSSS bonds are likely to continue surging as a share of global issuance volumes, according to the report.

Sustainable bonds accounted for 11.3 per cent of total global bond issuance in 2021, up from 6.7 per cent in 2020, according to Moody’s ESG Solutions.