Sustainable Bond Issuance Down During H1 2022

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    Stockholm (NordSIP) – According to the latest report from the Climate Bonds initiative, US$417.8 billion worth of debt labelled as green, social, sustainability, sustainability-linked, and transition bonds was issued during the first half of 2022. January saw the largest share of this amount issued (US$108.4 billion) during this period. Issuance appears to be 27% down this year vis-à-vis the same period last year.

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    Following this period, cumulative sustainable debt stock that has been issued under these labels amounts to US$3.3 trillion, of which green bonds represent over a third (US$1.9 trillion), emulating the share of sustainable debt flow issued during the first half of the year under the green bonds label (52%). During the same period, sustainability bonds, social bonds, sustainability-linked bonds and transitions bonds represented the remaining 21%, 15, 11% and 1%of all sustainable debt flows, respectively.

    Developed markets accounted for 60% of the deals while emerging markets represented 29%, an increase from the 20% witnessed in the same period of 2021. Geographically, China (US$48.2 billion), Germany and the USA originated the most amount and the highest deal count. However, dominated the market, with the EU (US$11.8 billion), the German (US$7.8 billion) and French (US$7.47 billion) governments and the European Investment Bank (EIB) (US$5.57 billion)were among the top 5 issuers. The only non-European issuer among the top 5 was the Bank of China (US$8.13 billion). A similar European dominance was witnessed across the green, social and sustainability segments of the market.

    The report highlights the inaugural issuances of sustainable bonds by the governments of the Philippines (US$1.5 billion), Mexico (US$ 982 million) and Denmark (US$762 million) during the first six months of 2022.

    On the regulatory front, the CBI also reports that Colombia was the first Latin-American country to publish green bond taxonomy, a step also taken by Singapore and South Africa. Regarding the adoption of nuclear and fossil gas projects as activities that can be labelled as transitional according to the the EU Taxonomy’s latest delegated act, the CBI seemed optimistic.

    “The CDA is not expected to result in many taxonomy-eligible gas and nuclear investments, due to stringent criteria such as the need for a fossil gas-fired power plant to replace existing solid/liquid fossil fuel electricity generation and result in a 55% GHG emissions reduction,” the report argues.

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.
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