ESG BONDS, A GROWING DEBT MARKET PAVING THE WAY FOR SUSTAINABLE INVESTMENTS

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Introduction

  • Environmental, Social, and Corporate Governance (ESG) labelled bonds are a fast growing segment in global capital markets; by YE20 the market reached a total size of USD 1.7Tr, with Green bonds having the largest share, representing 63% of the total.
  • In Europe, the total amount of ESG bonds issued in 1Q21 represents already 54% of the total amount issued in 2020. ARC expects that for 2021 the total issued amount will easily surpass YE20 levels, as a result of the strong commitment expressed by the European Commission’s objective to be the first net zero bloc by 2050, with will be supported by linking budget to green policy objectives.
  • The NextGenerationEU[1] program, that amounts to EUR 750Bn, will be an accelerator to transition and support a higher share of green and sustainable assets in the EU; Therefore, ARC expects that supranationals, sovereigns, financial institutions and institutional investors demanding ESG linked assets will pave the way for a material market growth and a better standardisation of ESG products.

 

[1]      NextGenerationEU is a EUR 750Bn temporary recovery instrument to help EU member states to repair the immediate economic and social damage brought about by the Covid-19 pandemic: https://ec.europa.eu/info/strategy/recovery-plan-europe_en#nextgenerationeu

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ESG BONDS, A GROWING DEBT MARKET PAVING THE WAY FOR SUSTAINABLE INVESTMENTS

10 Sep 2021

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