Green bonds are driving the global environment, social and governance (ESG) debt market, according to a new report by Bloomberg Intelligence
In t he first nine months of the year, green bonds issuance exceeded $505 billion or 48% of total sustainable issuance.
Social bond issuance rose 2% compared to last year but total sustainable issuance dropped 16% in line with other security types.
Total issuance for the month of September was down 18% from a year earlier, while the total for the third quarter of the year decreased by 32% to $255 billion from a year earlier
The report said that the euro increased to 34% of sustainable debt issuance in September after a weaker July and August.
The euro was also the preferred currency during the first nine months of 2023, with more than $400 billion dollar-equivalent, accounting for 38% of the total.
The dollar came in second place for the year to September at 30%, with $312 billion although this is down roughly 6% from a year ago.
The yuan increased on a year-to-date basis, with 8% of total issuance, up from 6% a year ago.
“We continue to expect the euro to be the major issuing currency, as government support appears to be less fractured when it comes to environmental, social and governance issues,” said Christopher Ratti, senior ESG analyst at Bloomberg Intelligence.
The International Bank for Reconstruction and Development was the largest issuer in Q3, with over $13 billion dollar-equivalent of debt using sustainability and green bonds across seven different currencies, coming to market every month in 2023.
The UK was the third largest issuer from July to September, selling $6.2 billion of green bonds, while remaining issuance in the top 10 included sustainability-linked and green loans, along with social and green bonds.
Governments, including supranationals, are the only sector that has increased its issuance, compared to 2022, up 13% to $363bn of global sustainable debt issuance.
However quarterly issuance fell 30% for the sector versus the third quarter in 2022.
Financials camr in second, adding $242bn year-to-date through September, though this is 21% lower versus the same period last year.
Healthcare remains the weakest sector, with only $6.35bn issuance, a more than 51% drop on the same period a year ago.
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