New report details how sustainable investment is thriving
A cumulative volume of $5.1 trillion in green, social, sustainability, sustainability-linked bonds, and transition bonds (collectively GSS+) has been recorded by the Climate Bonds Initiative as of 30 June this year.
Aligned with CBI’s dataset methodologies and best practice, the findings are detailed in the Sustainable Debt Market Summary H1 2024 with a breakdown of labelled bond markets.
While global interest rates remained higher than had initially been expected going into 2024, global debt issuance climbed to $13.2 trillion during this period compared to $9.8 trillion in the first half (H1) 2023, an increase of 35%. Nevertheless, the GSS+ market is thriving, with new issuers progressively entering the market and volumes set to surpass the annual record of $1trillion set in 2021.
$554 billion of aligned GSS+ volume was captured in H1 2024 alone, a 7% year-on-year increase compared to H1 2023. Green bonds accounted for 70% of H1 aligned volume, reaching $385.1 billion. This was followed by sustainability and social volumes contributing $93.9 billion (17%) and 70.5 billion (13%), respectively.
France attains sustainable finance podium position in its Olympic year.
In its Olympic year, France stands on the sustainable finance podium as a clear winner. Since hosting the UN Climate Change Conference (COP21) in Paris on 12 December 2015, culminating in the ground-breaking Paris Agreement, France’s lead in sustainable finance policy has underpinned the immense growth of its GSS+ market. As at the end of H1 2024, the country was the third largest source of cumulative aligned GSS+ volume with $542.9 billion, following supranational issuance ($763.2 billion) and the USA ($714.6 billion).
France’s momentum in labelled bond markets is setting the nation for a record year for GSS+ volumes.
France is also the largest source of aligned social deals with $216.2 billion by the end of H1. This has been championed by its social security agency Caisse d’amortissement de la Dette Sociale (CADES), which at the end of H1 had priced over $143.3 billion in aligned social bonds, making it the largest issuer in that category. France’s momentum in labelled bond markets is setting the nation for a record year for GSS+ volumes.
French aligned GSS+ volume in on track for a record 2024
Spotlight: aligned steel green bond issuance surges by 166%
CBI’s review of the steel and cement sectors has revealed two encouraging developments. Firstly, there has been an increase in aligned green bond volumes from steel and cement issuers and, secondly, most (57%) of the 21 companies assessed had credible transition plans in place.
Aligned steel green bond issuance surges by 166%
To support the flow of investment towards decarbonizing the hard-to-abate sectors, CBI has developed tools and guidance, including hard-to-abate sector criteria, transition plan guidance, and the inclusion of these activities as part of its Certification program, as well as GSS, and SLB dataset assessment methodologies.
A Transition Plan Monitor (TPM), which is an assessment of the quality of entity-level transition plans, is being built by CBI. Steel and cement were chosen as the first sectors to undergo analysis via the TPM.
The Climate Bonds Initiative is an international organization working to mobilize global capital for climate action by promoting investment in projects and assets necessary for a rapid transition to a low carbon and climate resilient economy. The strategy is to develop a large and liquid green and climate bonds market that will help drive down the cost of capital for climate projects in developed and emerging markets; to grow aggregation mechanisms for fragmented sectors; and to support governments seeking to tap debt capital markets. Partner organizations are empowered with the tools and knowledge needed to navigate, influence, and instigate change.
The Climate Bonds Initiative is an investor-focused not-for-profit. The work therefore is an open-source public good and falls into three workstreams: market intelligence, developing a trusted standard, and providing policy models and guidance.
