Green and Other Labelled Finance Markets Reach $4 Trillion - Markets Media
According to a recent report from the Climate Bonds Initiative (Climate Bonds), the total amount of finance in the Green, Social, Sustainability, Sustainability-Linked, and Transition (GSS+) sector exceeded $4 trillion in the first half of 2023, reaching a collective value of $4.2 trillion.
Bonds that satisfy the criteria set out in Climate Bonds' screening methodology are eligible for inclusion in the data collection and are categorized as aligned. Bonds that have been labeled but do not have enough information to determine their eligibility for database inclusion are classified as pending until adequate disclosure is provided. Bonds that do not meet the criteria specified by Climate Bonds' screening methodology are categorized as non-aligned and are not included in the datasets.
In the first six months of this year, a total of USD448 billion worth of GSS+ debt was recorded, showing a 15% decrease compared to the same period in 2022. Despite facing challenges from the global economic and political landscape, which have hindered debt issuances in the past two years, it is expected that the combined issuance will reach $5 trillion by the end of this year.
There was significant progress in green issuance during the first half of the year.
In the first half of 2023, the color green was prominent, representing 62% of the total GSS+ debt that was aligned. Financial companies had the largest share of green volumes, contributing 29% or $79.6 billion, with Intesa San Paolo being a major contributor with $5.5 billion spread over five deals in GBP and EUR. Non-financial companies, such as Orsted, Mercedes, and EDP, also played a significant role, contributing $68.7 billion or 25% of the market. Sovereigns were the third largest issuer type, with nine countries contributing a total of $52.4 billion towards the green volume.
GSS+ bonds show a reduced level of involvement from the United States.
The amount of GSS+ volume coming from the United States took a significant dip in the first half of 2022, going down to $39.8 billion from $65 billion in the same period. This decline in volume, which accounts for a 39% decrease, could potentially be influenced by the anti-ESG political language in the United States.
Sean Kidney, Chief Executive Officer of the Climate Bonds Initiative,
We are currently in the midst of a pivotal ten years for taking action on climate change. If we do not significantly reduce our emissions by 2030, the delicate balance of our planet's ecosystems will begin to unravel. While sustainable finance is making progress and becoming a $5 trillion market, it is imperative that we witness the annual raising of $5 trillion in sustainable finance during the latter portion of this decade in order to avert a catastrophic climate catastrophe.
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