(Credit: Pixabay)The corporate sector was responsible for 57% of the record-breaking number of sustainability bonds issued in the first nine months of 2021 — a 93% increase year over year, according to a Q3 2021 sustainable finance review by Refinitiv. The latest numbers add support to earlier predictions that the sustainability bond market could surpass $1 trillion in a single year by the end of 2021.
Leading the pack was JP Morgan, which underwrote 6.4% of sustainability bonds in the first nine months of 2021. BNP Paribas and CitiBank ranked second and third, respectively. The top ten corporate sustainability bond underwriters comprised 47.1% of the overall market, up from 40.3% a year ago.
In contrast, government issuers accounted for 41% of overall activity, down from 53% at this point last year.
Europe was the largest regional market for sustainability bonds, accounting for 56%, compared to 21% from the Americas and 19% from Asia Pacific.
During the first nine months of 2021, sustainability bonds totalled $777.6 billion — 57% more than a year ago and the highest quantity ever recorded in such a period, in terms of both dollars and number of issuances.
Refinitiv found that record-breaking numbers were not limited to the sustainable bond market:
Sustainability bonds, like traditional bonds, are financial instruments sold with a promise to eventually repay the principal and a fixed rate of interest. However, the revenue from sustainability bonds is specifically earmarked to fund environmental initiatives such as energy efficiency, clean transportation, and ecosystem protection.
