The Green Bond market is set to double to at least $70bn this year, according to figures cited by Christopher Flensborg, head of Sustainable Products and Product Development at Nordic bank SEB.
This follows a year in which the value of issuance tripled to over $36bn. Driving the increasing issuance are players in the market such as supranationals, municipalities and regions. Similarly, the clean energy, green building and transportation sectors continue to grow.
“Major investors have been committing large sums to the Green Bond market, which has both broadened and deepened, and this trend is expected to progress further. We have witnessed larger issues of green bonds with more players entering the market and investors have seen wider opportunities set in terms of credit quality, yield, maturity, geographies and currency,” Flensborg said.
“The introduction of several Green Bond Indices and the announcement that the Oslo Stock Exchange became the first stock exchange to launch a special list of Green Bonds has been encouraging, and significant developments within the market. Moreover, second opinion providers, which offer a high standard of environmental scrutiny, have grown considerably in number in response to rapidly increasing investor demand.”
“The issue of clarification of ‘what is green’ has been at the forefront of all market participants. With Green Bond Principles (GBP) revised [on] 27 March, independent external environmental assurance (or second opinion) and reporting continue to be of major importance for investors. Addressing these concerns will be a step in the right direction for the market to realise its potential.”
SEB, which claims to have invented Green Bonds together with the World Bank in 2008, has issued a wider report into the market. Click here to download ‘The Green Bond’ report