Sustainable bond sales, equity-raising at record highs in 2020

LONDON: Sales of bonds aimed at financing sustainable projects doubled in 2020 to hit a record high $544.3 billion while equity raising by companies deemed sustainable soared 65%, according to data from Refinitiv.

The COVID-19 crisis has further boosted investors' interest in issues such as health, inequality, education and the environment. That has increased the popularity of securities such as green bonds - used to fund clean energy projects such as wind farms - and social bonds that channel proceeds to socially beneficial causes.

Sustainable finance still comprises a tiny fraction of the market. Financial information provider Refinitiv estimates sustainable loans and bonds together amounted to just under $750 billion in 2020, compared to total bond global issuance last year of $10.2 trillion.

But the market is growing fast as more capital pours into funds focused on environmental, social and governance (ESG) factors and indexes exclude debt from sectors deemed to be unethical or polluting.
Refinitiv said in a note sent late on Thursday that issuance of green bonds rose 26% last year to $222.6 billion, while sales of both sustainability and social bonds surpassed the $100 billion mark each for the first time.

The World Bank was the largest issuer of sustainable debt at $62.2 billion, while US investment bank JP Morgan underwrote the most bonds at $34.3 billion for a 6.3% share of the market, Refinitiv said.

Equity raising too was strong amongst companies described as sustainable, with a 65% jump in equity raising at $13.8 billion, also a record, Refinitiv data showed.