Sustainable bond issuance crossed the $1 trillion milestone in 2021

Sustainable bond issuance crossed the US$1 trillion milestone in 2021 as corporate and sovereign issuances surged amid another record-breaking year, according to Environmental Finance.

Environmental Finance report that although all types of sustainable bond labels gave record-breaking totals, green and sustainability-linked bond issuances were the main drivers of growth. Notably, sustainability-linked bond issuance grew by more than ten times to $93 billion in 2021 from $8.8 billion in 2020.

Corporate issuances surge; corporate issuer diversity grows

Environmental Finance reports that corporate issuance more than doubled to $383 billion in 2021 from $157 billion in 2020. In terms of issuer type by volume, they count as more than double the next largest issuer type (supranationals). The growth in corporate sector issuance is reported to be driven by a significant increase in the issuance of sustainability-linked bonds.

Equally of note is the diversity of the corporate issuers. Among the top-five largest issuers of sustainability-linked bonds were Teva Pharmaceutical, Italian energy infrastructure firm Enel, Italian motorway construction and management firm ASTM, and UK supermarket Tesco.

Sovereign issuances surge; a year of market debuts

It was also reported that sovereign issuance crossed the $100 billion milestone for the first time, more than doubling to $103 billion in 2021 from $42 billion in 2020, helped by sizeable debut issuances from the UK, Italy and Spain.  

Transition bonds: on their way out?

An interesting point of note from Environmental Finance was the question of whether transition bonds could be experiencing their “last hurrah”, as uptake and acceptance levels remain low, while the largest issuer of the instrument and transition bond pioneer, Snam, has switched to sustainability-linked bonds.