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Climate-Related Bonds Hit $600 Billion

Thanks to recent rapid growth in the labelled “green bonds” sector, the total for climate-related bonds issued over the past decade has now risen to $600 billion, according to a new report from the Climate Bond Initiative.

This latest state-of-the-market report noted that around 10% of the total $600 billion figure were now via green bonds — as compared to around 70% via transportation-related bonds, 20% via clean energy–related bonds, and the reminder made up of water-, agriculture-, and forestry-related bonds.

Unsurprisingly, much of this figure is the result of interest from China — which accounted for around a third of the total figure (which, to be exact, is $597.7). The US and the UK were responsible for a notable amount as well, with the US accounting for roughly 12%, and the UK for roughly 9%.

As mentioned at the start of the article, much of the recent growth has been via green bonds — which have accounted for around a third of the $95 billion figure that relates to growth over the past year. As it stands, $65.9 billion of labelled green bonds have been issued to date. Of this figure, $36.6 billion were issued over just the last year — representing a nearly three-fold rise over 2013 issuance.

This recent surge in growth is expected to continue this years as well, according to the report — though the $18 billion issued so far this year is currently well below the prediction of $70 billion for the whole of 2015.

“The rapid growth of the green bond market over the last year has proven that there is strong investor demand for financially competitive green bonds,” according to the report. “However, while the growth rates of the green bond market are impressive, and volumes are starting to be significant, the market is still tiny compared to the overall $100 trillion bond market. To address the climate change challenge we need continuing rapid growth in the market, especially in emerging markets.”

Image Credit: Vestas

 

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Written By

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.

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