Record sales of green bonds in the first half of 2024
Bloomberg Professional Services
This article was written by Jonathan Gardiner, Sustainable Indices Product Manager at Bloomberg.
Green bonds sales in the first half of the year topped $356 billion – the busiest half year observed since the market’s inception, data compiled by Bloomberg show. After a busy first quarter, driven by issues from both corporates and governments, when sales reached $191bn, second quarter sales of green bonds fell back to $165 billion.
Sustainable bond issuance as a whole set new records in the first quarter of 2024, boosted by government bond issues, as well as transition bonds in Japan, the data show. Issuance of impact bonds (i.e. green, social, sustainability and sustainability-linked) was stronger in the first quarter than the second, with Q1 totaling $328 billion, up 7.5% on the same period last year.
The largest green bond sale in the first 6 months of the year was from the Italian government, in May, which totaled €9 billion. The Japanese government debuted its green transition bond, with 3 separate transactions occurring in the first 6 months and totaling over $12 billion – part of their plan to significantly ramp up issuance over the next 10 years. Other government issuers of green bonds included France, Germany, Australia, Canada and the United Kingdom – with more than $140 billion in sales from January through June, accounting for the largest sector of green bonds issued.
Social bond sales in Q1 increased sharply, to $52 billion, up 33% from the same period last year. However, sales tapered in the second quarter, resulting in the total sales for the half year to remain flat compared to the same period last year, at $82 billion – significantly reduced compared to the volumes sold during COVID-19 (the H1 figure in 2021 was $155 billion). However, volumes have remained higher than pre-pandemic times. The largest social bond of the year to date was issued by La Caisse d’Amortissement de la Dette Sociale (CADES), owned by the French government, at €4 billion. The Icelandic government became the first sovereign borrower to issue a labelled gender bond, focusing on gender equality.
Sales of sustainability bonds achieved record levels in Q1, at $72 billion, up 20% compared to the same period last year. The half year figure was also up, at $124 billion, some 10% higher than the same period last year and only just shy of the previous record set in H1 2021, at $129 billion. The International Bank of Reconstruction & Development (IBRD) was responsible for the largest sustainability bonds issued in the first 6 months of 2024, at $5 billion.
Issuance of sustainability-linked bonds (SLBs) continued their downward trend. Sales in Q1 retreated more than 50%, to $12.4 billion, the lowest first quarter since 2020. Half year volumes followed the same trend, down 47% to $22 billion compared to the same period last year. Enel, the Italian utility, was responsible for the largest sustainability-linked bond of the year to date, at $1.25 billion, issued in June. Enel issued 4 sustainability-linked bonds through the half year, totaling approximately $4 billion.
Bloomberg’s Global Aggregate Green, Social and Sustainability (GSS) bond indices, voted best Sustainable Index of the year by Environmental Finance (link), provide investors with an objective and robust measure of the global market for fixed income securities issued to fund projects with direct environmental and/or social benefits. The year-to-date return for the GSS index is –3.46%, some 14 bps above that of the Global Agg Index, highlighting improved returns for investors with an appetite for sustainability-focused investment.
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