For a second consecutive year, green bonds issuance has crossed $100 billion, marking a major milestone for low-carbon funding around the world.
The Climate Bonds Initiative (CBI) has reported that the total volume of green bonds issued this year crossed $100 billion mark in September. This includes bonds that are certified by CBI as well as those that, while not certified by CBI, follow CBI definitions for a green bond. If one includes bonds labelled as green but do not conform to the CBI definitions, the volume increases to $135.7 billion as on 7 October 2018.
CBI reported that it was a €500 million bond issued by the European Investment Bank that helped the global green bonds tally for the year to cross the $100 billion milestone. The EIB bond was Sustainability Awareness Bond.
While the developed countries remain leaders in issuance of green bonds, developing countries like China are making their presence felt in the global market. Chinese companies have a huge government mandate to issue green bonds on a large scale, and that has been reflected in last year’s as well as this year’s tally.
In 2016, CBI-certified and CBI-aligned bonds worth around $87.2 billion were issued. Additionally, labelled green bonds that did not conform to CBI definitions increased the total issuance that year to around $98 billion. Issuance in 2016 was nearly twice the volume issued in 2015.
In 2017, the CBI initially reported issuance of $120.2 billion worth of certified or CBI-aligned green bonds, and an additional $10.2 billion of labelled green bonds. These figures were later revised to $155.5 billion worth of bonds where at least 95% of the proceeds are dedicated to green projects, and an additional $22.5 billion worth of bonds which were labelled ‘green’ but did not align with CBI definitions.
The CBI recently released a report “Bonds and Climate Change – The State of the Market 2018” claiming that at the end of H1 2018, volume of outstanding ‘climate-aligned’ bonds was worth around $1.45 trillion. These bonds include those deriving 75-100% of their revenues from ‘green’ business lines and labelled green bonds.