Sustainable bond issuance may only repeat last year’s US$1 trillion volumes in 2022, after market headwinds suppressed Q1 activity. According to Moody’s, global issuance of green, social, sustainability and sustainability-linked bonds totalled US$203 billion in Q1 2022, down 11% from Q4 2021 and 28% lower than Q1 2021. Moody’s said the impact would only be temporary, citing the need for climate mitigation and adaptation financing, accelerated decarbonisation efforts to achieve net zero goals, growing regulatory attention on sustainability “and a continued focus on the interconnectedness of environmental and social objectives”. Earlier this week, the Association for Financial Markets in Europe reported Q1 2022 ESG bond and loan issuance in Europe down 32.4% from Q1 2021 and 27.2% below Q4 2021 issuance, but noting that sustainability-linked bonds backed the trend. Overall, ESG bond issuance represented 14.1% of total European bond issuance during Q1 2022, falling from 19.5% in 2021.
2022 Sustainable Bond Issuance Could Stall – Moody’s
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