The green bonds market is on track to set another record this year, despite a relatively slow summer for the fast-expanding sector. That is the conclusion of a new briefing note from Nordic banking giant SEB, which forecasts green bond issuance is set to reach $185bn in 2018 delivering growth of around 20 per cent on 2017 levels.
Christopher Flensborg, head of climate and sustainable financial solutions at SEB, argued that “positive prospects are plentiful for the rest of the year” following a record first half of 2018. The update confirms the green bond market to date this year has grown 19 percent on 2017 levels with $97bn of bonds issued. As a result, total cumulative green bond issuance is now hovering just below the $500bn mark.
The market for corporate green bonds has been “particularly buoyant,” the report said, with $44bn of issuances representing a 40 per cent improvement on last year.
“The summer slowdown is more a function of global bond market conditions than any specific to green finance,” it states. “European bond deals from July 1 – August 8 were at their lowest levels in 13 years and the US corporate bond market saw its quietest July in at least 5 years. Despite this, our view remains that positive prospects are plentiful for the rest of the year, with the market continuing its fruitful quest of sectoral maturation and diversification with 24 repeat issuers in 1H18 and large economies featuring heightened activity alongside new sectors.”
However, concerns will remain that the market will fail to deliver the near doubling in size it achieved last year, further fueling fears that overall green investment levels are failing to keep track with what is required to deliver low carbon infrastructure at sufficient scale and meet the goals of the Paris Agreement.
Source Business Green