Record green bond issuance as transition takes off

SEB predicts that total sustainable bond issuance will exceed $1tr in 2021, driven by a significant increase in issuance of green and social bonds and a breakthrough for sustainability-linked debt.

In the latest issue of the Nordic financial services group’s report The Green Bond: The Transition Takes Off, Christopher Flensborg, head of climate and sustainable finance notes that, “We now expect sustainable bond issuance of more than $1tr this year, which is 25 per cent more than we expected in our most optimistic estimate at the start of the year.”

SEB reports that the first quarter of 2021 was a record quarter for the sustainable debt market, with $378bn of new issuance, representing 50 per cent of the total market for 2020, driven by green and social bonds, with issuance of $150bn and $94.2bn, respectively. At the same time, issuance of sustainability-linked bonds was more than ten times higher than in the same period last year and has already surpassed the total for 2020 while sustainability-linked loans have doubled.

“Funding is rising because the transition is gaining pace faster than anyone had anticipated,” notes Thomas Thygesen, Head of research, climate and sustainable finance. “2021 will see a significant increase in public investment in energy infrastructure, and we now see the first signs of a true disruption in energy-using sectors like autos.”

SEB, which together with the World Bank developed the green bond concept in 2007/2008, publishes the research publication The Green Bond six times a year.

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