The push for a green recovery from the Covid-19 pandemic, along with increased attention to environmental issues and gender equality, has helped drive record global issuance of sustainable bonds, Moody’s Investors Service reports.
Global sustainable bond issuance hit a new quarterly record of US$231 billion in the first quarter of 2021, up 19% from the previous quarter, and more than triple the issuance in the first quarter of 2020.
Moody’s said that each of the three segments — green, social and sustainability bonds — reached record levels in Q1, led by US$99 billion of green bonds, US$90 billion of social bonds, and US$42 billion of sustainability bonds.
As a share of total global bond issuance, sustainable bonds accounted for 9.4% of the market in the first quarter, which was the second-highest share on record, the report noted.
Moody’s also reported that there was strong growth in sustainability-linked loans in the first quarter, which reached a record US$97 billion, up 29% from the previous quarter.
Issuers are increasingly focusing on gender equality as a feature in their new issues, the rating agency noted.
“There have been at least 23 bond and loan issuances globally, exceeding an aggregate $9 billion, that are linked exclusively to gender-related issues,” the report said.
“Issuance volume will grow over time and will likely be credit positive for corporate issuers and national and regional governments over the long term,” the report said, noting that “expanded opportunities for women can reduce operational and reputational risk and benefit economic growth and social cohesion.”
Looking ahead, increased government attention on climate change and sustainable development is seen driving further growth in global sustainable finance markets.
“Recent actions from some of the world’s largest economies – including China, the European Union and the U.S. – will have a significant impact on the growth and development of sustainable finance markets globally,” the report said.