{"id":118268,"date":"2021-07-15T15:09:10","date_gmt":"2021-07-15T15:09:10","guid":{"rendered":"https:\/\/fin2me.com\/?p=118268"},"modified":"2021-07-15T15:09:10","modified_gmt":"2021-07-15T15:09:10","slug":"global-sustainable-debt-issuance-will-crack-1-trillion-mark-in-2021-iif","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/global-sustainable-debt-issuance-will-crack-1-trillion-mark-in-2021-iif\/","title":{"rendered":"Global sustainable debt issuance will crack $1 trillion mark in 2021 -IIF"},"content":{"rendered":"
LONDON (Reuters) – Global issuance of sustainable debt is on track to surpass $1 trillion this year with green bonds dominating while emerging markets have some catching up do to, the Institute of International Finance (IIF) said in a report.<\/p> With corporations and financial institutions under growing pressure from investors to up their environment, social and governance (ESG) game, the issuance of bonds to raise money for climate-related or social projects, or linked to sustainability targets, is an increasingly popular option.<\/p>\n Sustainable debt sales more than doubled year-on-year in the first half of 2021 to over $680 billion, closing in on the $700 billion issued during the whole of last year.<\/p>\n \u201cWith Net Zero commitments in the spotlight, an acceleration in low-carbon energy investment and technological innovation has been supporting ESG securities issuance, along with strong investor appetite,\u201d said IIF economist Khadija Mahmood.<\/p>\n The latest issuance bonanza will see the total market size grow to well above $3 trillion during this year, the IIF found.<\/p>\n Green bonds, which are used to finance climate-related or environmental projects, made up the lion\u2019s share of all new issuance, at 35%, led by Germany, China and France.<\/p>\n While sovereigns, financial institutions and utilities dominate issuance, firms from elsewhere in the energy sphere as well as materials and consumer discretionary sector increasingly joined the fray.<\/p>\n Other types of debt falling into the sustainable category also recorded stellar issuance in the first half of the year.<\/p>\n Issuance of social bonds, which raise funds for projects with positive social outcomes, more than tripled year on year to $140 billion, boosted in part by the European Union\u2019s introduction of the Sustainable Finance Disclosure Regulation (SFDR) which imposes mandatory ESG disclosure obligations.<\/p>\n Sales of sustainability-linked bonds, where an issuer pledges to reach specific ESG targets or face, for example, higher coupon payments – rose nearly four times to $160 billion.<\/p>\n Sustainability bond issuance, which can raise funds for a mix of projects, surged to $90 billion in the first six months of 2021, with the dollar replacing the euro as the main funding currency.<\/p>\n Meanwhile issuers from developing countries had some catching up to do.<\/p>\n \u201cEmerging markets still represent less than 15% of the sustainable debt universe,\u201d said Mahmood.<\/p>\n China, Chile, Turkey and Mexico are the biggest issuers currently.<\/p>\n (This story corrects billion to trillion in headline)<\/p>\n