Credit ratings, research, and risk analysis provider Moody’s Investors Service released its quarterly sustainable finance update today, highlighting the dramatic growth in issuance of green, social and sustainability bonds.
According to the Moody’s report, global sustainable bond issuance reached a record $231 billion in Q1 2021, more than triple the same quarter last year, and up more than 19% over the prior record set in Q4 2020.
Matthew Kuchtyak, AVP-Analyst in Moody’s Investors Service’s ESG Group, said:
“Sustainable bond volumes are surging this year given strong sustained interest among debt issuers and investors. A heightened level of governmental policy focus on climate change and sustainable development globally will also spur further market growth and harmonization.”
Following the strong performance in the quarter, Moody’s now expects the sustainable bond market to surpass its recent forecast of $650 billion. Last year’s issuance was a record $491 billion.
Other highlights of the report include:
- Surge in sustainability-linked debt, with sustainability-linked loans reaching $97 billion in the quarter, up 29% over Q4, and sustainability-linked bond issuance soaring 57% over the prior quarter to $8.6 billion.
- Sustainable bonds represented 9.4% of global debt issuance in the first quarter. Moody’s expects sustainable bonds to account for 8-10% of global debt issuance for 2021.
- Green bond issuance set a quarterly record $99 billion, more than double issuance in the prior year quarter, which was impacted by the COVID-19 pandemic.
- Social bond issuance was up more than 8x over Q1 2021 to a record $90 billion, driven by offerings by EU, CADES and UNEDIC, accounting for $73 billion.
- Sustainability bonds also saw a record quarter, with issuance reaching $42 billion, nearly 3x the prior year quarter.