Global green bond issuance is expected to be between $300-$375 billion this year, after a record year last year, according to research from two companies who track the growing market.
Green bonds are a category of fixed-income securities that raise capital for projects with environmental benefits, such as renewable energy or low-carbon transport.
The bonds make up a small fraction of the overall bond market, but they are attracting attention because meeting emissions-cutting targets will need trillions of dollars of capital from public and private sectors.
According to Nordic corporate bank SEB, issuance reached a record high of $263 billion last year and since the green bond market started in 2008, it has raised $840 billion.
SEB expects green bond issuance to reach $375 billion this year and cumulatively, the market should pass $1 trillion in size.
Moody’s Investor Service expects green bond issuance to reach $300 billion in 2020, while social and sustainability bond issuance will reach $25 billion and $75 billion respectively.
The financial sector is increasingly incorporating sustainability factors into their investment decisions and risk management. This will continue in the coming years which will support the green bond market, it said.
(Reporting by Nina Chestney; Editing by Toby Chopra)