SEB’s Green Bond report predicts that 2022 could see a jump of 25 per cent in global investments in renewable energy to $400 bn, and sustainable financing will reach a total of around $2.tr, driven mainly by strong growth in green bond issuance.

The energy crisis currently hitting Europe and Asia in particular will affect renewable energy investments going forward, with a surge in the cost of energy and electric power, which has made all kinds of energy production extremely profitable. This crisis will pave the way for a break with the flatlining trend of the past decade.

“After a decade in which clean energy investment was capped at $300bn, we expect a jump to close to $400bn in 2022 as governments start to spend more on infrastructure,” said Thomas Thygesen, head of research, climate and sustainable finance, at SEB. “We see upside to that estimate as companies faced with sky-high energy bills may see the possibility to offset that cost by engaging in now extremely profitable investments in de-centralised renewable energy supplies.”

The overall growth in sustainable financing in 2022 will mainly be driven by the issuance of green bonds, which is seen increasing 50 per cent year-on-year to more than $900bn in a baseline scenario and by 70 per cent to just over $1tr in a growth scenario.

“While we don’t expect another doubling of the market like we saw in 2021, we are still very confident that the exponential growth of sustainable finance is set to continue in 2022,” said Gregor Vulturius, advisor at climate and sustainable finance at SEB. “In particular, we forecast that sustainable-themed bonds will continue to grow strongly next year, with new issuance of green, social, sustainability and sustainability-linked bonds increasing by between 35 and 53 per cent.”

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