Global Sustainable Bond Issuance To Surpass $1.5 Trillion In 2022, Report Says

Rhea-AI Summary

S&P Global Ratings forecasts that global sustainable bond issuance will exceed $1.5 trillion in 2022, despite stagnation in overall bond issuance. Growth is driven by sustainability-linked and green bonds as issuers respond to climate commitments. Sustainability-linked bonds are expected to be the fastest-growing segment, while green bonds will maintain dominance. Additionally, social and sustainability bonds are anticipated to diversify further to support the 2030 Sustainable Development Goals. Establishing clear standards and regulations will be vital for market integrity.

Positive

• Projected global sustainable bond issuance to surpass $1.5 trillion in 2022.
• Sustainability-linked bonds are the fastest-growing segment, enhancing market accessibility.
• Increasing sovereign bond issuance to finance green projects following COP26 commitments.

Negative

• None.

NEW YORK, Feb. 7, 2022 /PRNewswire/ -- (S&P Global Ratings) -- Global sustainable bond issuance is expected to surpass $1.5 trillion in 2022 even as global bond issuance stagnates overall, said a new report S&P Global ratings released today. This growth will be driven partly by the booming sustainability-linked and green bond markets as public and private sector issuers tackle their climate commitments.

Sustainability-linked bonds will be the fastest-growing segment of the market. Because proceeds are typically not ring-fenced for specific environmental or social projects, these instruments have proven more flexible and accessible than use of proceeds instruments for a variety of issuers.

Green bonds will also see record issuance volumes in 2022, maintaining their position as the dominant sustainable bond category. Many countries committed to increasing their emissions reduction targets at COP26, thus sovereign bond issuance to finance green projects will likely accelerate.

We also expect continued growth of social and sustainability bonds as they diversify into new projects in support of the 2030 Sustainable Development Goals agenda.

As diversification and innovation in sustainable bond structures grows, ensuring greater integrity and credibility across the market will be key. Efforts to further establish and encourage the uptake of clear standards, regulations, and disclosure requirements will be critical.

This report does not constitute a rating action.

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SOURCE S&P Global Ratings

FAQ

What is the forecast for global sustainable bond issuance in 2022 by S&P Global Ratings?

S&P Global Ratings forecasts that global sustainable bond issuance will exceed $1.5 trillion in 2022.

Which segment of sustainable bonds is expected to grow the fastest in 2022?

Sustainability-linked bonds are expected to be the fastest-growing segment of the sustainable bond market in 2022.

How will green bonds perform in 2022 according to the S&P Global report?

Green bonds are expected to see record issuance volumes in 2022, maintaining their position as the dominant category.

What key factors are driving the growth of sustainable bonds in 2022?

The growth is primarily driven by climate commitments from public and private issuers and increased sovereign bonds for green projects.

What is essential for the integrity of the sustainable bond market according to S&P Global?

Establishing clear standards, regulations, and disclosure requirements is vital for ensuring greater integrity and credibility in the sustainable bond market.