Global green bond and loan issuance climbed by nearly 50% last year to a record high of almost $255 billion, as more investors sought to raise capital to support efforts to combat climate change, an analysis by the Climate Bonds Initiative (CBI) shows.
Green bonds are a growing category of fixed-income securities that raise capital for projects with environmental benefits, such as renewable energy or low-carbon transport.
The bonds make up a small fraction of the overall bond market, but they are attracting attention because meeting emissions-cut targets will need trillions of dollars of capital from public and private sectors. Total green bond and loan issuance last year of $254.9 billion was 49% higher than issuance in 2018, CBI data seen by Reuters shows. That was above the CBI's forecast of $230 billion to $250 billion for the full year of 2019.
The CBI is a non-profit organisation which analyses the green bond market, provides government policy advice and administers a certification scheme for green bond issuance.
For 2020, it expects $350 billion to $400 billion of global green bond and loan issuance. To enable the transition to a low-carbon economy, policymakers say $1 trillion a year of green investment is needed. "The 2019 results and 2020 estimates bring the vital international milestone of $1 trillion in annual green investment by 2021/2022 into sight," said CBI chief executive Sean Kidney.
"Acceleration into trillions of annual investments to support transition, adaptation and resilience must become the hallmark of the new decade," he added. The largest international green bond market was the European Union, with $106.7 billion of issuance last year. The top three countries for issuance were the United States at $50.6 billion, China at $30.1 billion and France at $29.5 billion. The proceeds of green bonds were mostly directed towards clean energy projects, low-carbon buildings, low-carbon transport, water and land use and waste.
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