Green bonds face turbulence (HSBC)

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he USD71.4 billion of green bonds issued in the first half of 2018 is a 16 per cent increase on last year and puts this environmentally-friendly finance back on a growth path. However, green bonds face turbulence, not only because of weakness in emerging-market bonds, but because of planned regulation and the market’s increasing complexity.

Issuance in the first quarter of bonds used to finance green projects had been 32 per cent down on the previous three months but a strong second quarter means supply is on track to be USD140 billion to USD180 billion for the whole year.

Promotion

However, regulatory moves could impact the green-bond market significantly. The European Commission is quickly advancing plans to regulate the market: an EU report on sustainable finance published in January 2018 was followed by an Action Plan in March and a new technical-expert group in June.

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Green bonds face turbulence | Insights | HSBC