Green bonds lead the way in sustainable debt
Green bonds experienced a steady recovery last year, representing the largest part of the sustainable debt universe.
Research from RWC found issuance of sustainable debt rose from US$323 billion ($419 billion) to $418 billion in 2020.
Green bonds were those that were issued by governments, banks, local governments and corporations to finance climate change and other environmental solutions.
Brian Ellis, fixed income portfolio manager at Calvert, said: “The green bond market has grown to levels not many would have imagined at the beginning of this decade. In our view, this trend will likely continue as global demand grows for debt that supports environmental and other sustainability-focused projects.
“Despite early concerns about a potential shortfall in 2020 issuance, $223 billion of green bonds was brought to market by mid-December, with the yearly total set to fall just shy of the market's 2019 high-water mark of $255 billion. Looking ahead in 2021, many analysts project the strong recovery in green bond issuance to continue — estimates range from $300 billion to nearly $500 billion.
He said sovereign interest in green bonds was expected to increase this year with the UK, Canada and Spain set to issue inaugural green bonds while the European Union would include them in their pandemic recovery fund.
AUTHOR
Laura Dew
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