Global issues of maturing debt securities will exceed a trillion dollars this year, green bonds will dominate, and emerging markets will catch up, says a report by the Institute of International Finance (IIF) in Washington
Corporations and financial institutions are under increasing pressure from investors to contribute more to environmental, social and governance (ESG) efforts, so bond issues to raise money for climate, social and sustainability projects are growing in popularity. development, writes Reuter.
In the first half of the year, the sale of debt securities more than doubled to USD 680 billion, approaching the sum of USD 700 billion achieved in the entire last year. The latest rush in emissions will bring the combined market to over $ 3 trillion this year, assesses IIF
– With net zero liabilities in the spotlight, the acceleration of investment in low-carbon energy projects and technological innovation became a factor strongly supporting the issuance of such ESG bonds, and there was a strong demand from investors – explained the IIF economist Khadija Mahmood.
Green bonds used to finance climate or environmental projects accounted for the lion’s share of new emissions, accounting for 35%. whole, most were broadcast in Germany, China and France. The issuers were dominated by domestic investment funds, financial institutions and municipal services companies, and they were increasingly joined by companies from all areas of the energy, materials and consumer goods industries.
Other types of debt securities that fall under the redeemable category also saw huge growth in the first half of the year. Issues of social bonds that raise funds for projects with positive social outcomes have more than tripled to $ 140 billion, in part as a result of the European Union’s introduction of the Sustainable Finance Disclosure Regulation (SDFR).
Maturing bonds to maturity to secure funds for mixed projects rose to $ 90 billion after six months, with the dollar replacing the euro as the main funding currency.
However, issuers from emerging markets have a significant backlog – emerging markets now account for less than 15 percent. the world of sustainable debt, said Mahmood. Currently, the largest issuers are China, Chile, Turkey and Mexico.
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