Global sustainable debt issuance is on track to surpass $1 trillion in 2021 – up 30% from 2020’s totals. However, emerging markets still represent less than 15% of the sustainable debt universe, highlighting strong growth potential; China, Chile, Turkey, and Mexico are the top issuers. The outstanding green bond market is now over $1 trillion, as the non-financial corporate issuer base broadens. Updated voluntary market principles and guidelines are supportive for market growth and harmonization. 

Global sustainability-linked debt issuance (loans and bonds) is on track to surpass $320bn in 2021 – triple 2020’s totals; With ambitious climate/ESG finance targets, financial firms are the biggest issuers of sustainability-linked loans this year.

The relaunch of an active and ambitious G20 Sustainable Finance Working Group has raised hopes for greater alignment in sustainable finance policy and regulation. A well- targeted approach—focused on taxonomies, climate risk and disclosure—and close coordination with global standard setting bodies would have maximum impact, supporting the over-arching goal of sustainable market development.  

The IIF Sustainable Finance Monitor covers key developments in the global sustainable finance agenda. In the April 2021 issue, we examine climate liability and shareholder activism as well as policy and regulatory updates and a market snapshot of tech, infrastructure, R&D, and real estate. 

Returns on green bond indices tend to be more volatile than for conventional bond benchmarks, with significant differences across sectors.  Overall, green bonds exhibit similar volatility-adjusted returns as conventional bonds.

Net zero: 50% of emissions reductions needed over 2030-2050 will rely on technologies currently still under development; R&D is urgently needed to reduce “green premiums,” but there is a clean energy R&D annual shortfall of $225bn; Policy action is key: government incentives and risk mitigation can galvanize private investment into clean energy R&D

This summary of the Institute of International Finance’s first-ever Sustainable Finance Summit in April offers new insights on what senior regulators, policymakers and financial sector leaders from around the world are saying about mobilizing capital for climate and sustainable development goals.

The IIF Sustainable Finance Monitor covers key developments in the global sustainable finance agenda. In the April 2021 issue, we examine the proliferation of net zero ambitions from governments, corporates, and financial firms. 

The global sustainable debt market breached the $2tn mark in Q1 2021 and is fast approaching $3tn. Green bond issuance has surged as corporate net-zero emissions commitments accelerate.