Energy Procurement, Finance, Sourcing Renewables  -  January 11, 2021

BloombergNEF reports sustainability and green bonds grew in 2020

BloombergNEF announced Jan. 11 that sustainable debt (sustainability bonds) grew 81% in 2020 to $68.7 billion, while the longest-established theme, green bonds, saw volumes rise 13% to a new record of $305.3 billion. Growth was not across the board in 2020, however both sustainability-linked loans and green loans saw 15% reductions in issuance, to $119.5 billion and $80.3 billion respectively.

“Covid-19-related disruption affected issuance of some sustainable debt instruments in 2020, but spurred others,” Mallory Rutigliano, a sustainable finance analyst at BloombergNEF, said in a statement. “Overall growth of almost 30% in the market showed that sustainability continues to rise up on the agenda for investors, businesses and governments. This relatively new market is now being seen as a tool global economies can use to build back greener and socially fairer.”

Green bonds, raised to support environmental activities, saw an impressive swell, particularly in the closing months of 2020. Offerings through August were down compared to the prior year, but they surged in September with a whopping $62 billion. The momentum continued in the fourth quarter. This allowed green bonds not only to set a new annual record but took cumulative green bond issuance since 2007 to more than $1 trillion.

“Growing demand from investors and stakeholders will encourage the sustainable debt market to innovate and push new types of instruments,” Maia Godemer, sustainable finance analyst at BNEF, also said in the statement. “There is still a need for stronger scrutiny of the sustainable credentials of these products, and more transparency will be required from issuers. However, the backing of central banks like the ECB and of regulators around the world suggests we will see further, robust growth.”

BNEF will publish an in-depth review of the sustainable finance market in its semi-annual Sustainable Finance Market Outlook, due out later in January.

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