A report by Climate Bonds Initiative, an international non-profit organisation dedicated to climate change solutions and promoting large-scale investment in the low-carbon economy, has said the sustainable debt for the green market reached $1.7tn at the end of 2020, with green bonds hitting $1.1tn.
The Sustainable Debt-Global State of the Market report, which assesses the scale and depth of the green, social and sustainability debt market, showed that $700bn worth of GSS instruments were issued in 2020, nearly double that of 2019 that stood at $358bn.
The report said that over 10,000 instruments had been issued since 2006, with the cumulative green bonds standing at $1.1tn, sustainability bonds at $316.8bn and social bonds at $315.6bn.
The report further noted that 80 per cent of the green volume originated from developed markets, with emerging markets accounting for 16 per cent. Overall, Europe as a continent accounted for the largest source of green debt with 48 per cent of the total.
Reacting to the report, Rupert Cadbury, a fixed income portfolio strategist at State Street Global Advisors, said “With $1.71bn of green bond investments, State Street Global Advisors has been an active investor in green bond issues globally since 2012.
“The Sustainable Debt-Global State of the Market report helps investors to understand and navigate the latest developments and trends in the GSS bond space and provides an important reference tool to formulate discussions with clients, as well as climate-related initiatives and partnerships.
“Importantly it can also help drive our innovation, as we continue to develop climate-related investment products and strategies for investors.”
Also commenting on the report, Chief Executive Officer, Climate Bonds Initiative remarked: “The green, social and sustainability markets have been at the foundation of climate-conscious recovery from the pandemic.
“A key feature of the 2020 labelled bond market is the broadening and deepening of thematic issuance. The emergence of a transition label points towards the pathways investors and corporates in basic industries must take towards net zero.
“The rise of social and sustainability issuance indicates welcome market developments towards building resilience and adaptation measures as part of sustainable development. 2020 was a demonstration that business-as-usual economic policy is not sufficient to address multiple and sustained shocks of the sort that climate impacts will increasingly drive.
“The gap between current investment levels and the sustained flow of global capital in trillions towards climate and green solutions is yet to be bridged.”
Last year, the Minister of the Environment, Dr Mohammad Mahmood Abubakar, announced that the Federal Government of Nigeria would launch a green bond initiative to the tune of N25bn to support eco-friendly initiatives and finance projects contributing to the ecological transition.
