Sustainable bond issuance increased by 65% in Q2
The combined total was driven by record quarterly issuance of social bonds ($33bn) and sustainability bonds ($19.1bn), as Covid-19 pushed issuers to respond with labelled bonds. Green bond volumes too rebounded to $47.8bn, recording a 26% increase over the first quarter. However, this is still modest when compared to last year.
Moody’s forecasts total sustainable bond issuance in 2020 could reached $325bn to $375bn while green bond issuance could be $175bn to $225bn. Combined social and sustainability bond volumes could now total $150 billion for the year as coronavirus pandemic response efforts and heightened awareness of social issues related to healthcare and inequality continue to support issuance, said Matthew Kuchtyak, AVP-analyst at Moody’s Investors Service.
The key drivers in the second quarter include the publication of Sustainability-Linked Bond Principles, the 2020 update of Social Bond Principles and guidance documents for Green Loan Principles and Sustainability Linked Loan Principles. This is in addition to China’s green bond guidelines update that will result in greater internalisation of Chinese green bonds over time.