In a remarkable stride towards a sustainable future, Green, Social, Sustainability, Sustainability-Linked, and Transition (GSS+) finance volumes exceeded $4.2 trillion in the first half (H1) of 2023. This notable achievement was reported by the Climate Bonds Initiative and reflects the growing global commitment to climate change and sustainability.
However, it’s noteworthy to mention that the first half of 2023 witnessed a 15% YoY decline in the GSS+ market. Despite this temporary dip, the market is anticipated to bounce back, with projections anticipating it to reach a total issuance of $5 trillion by the end of the year.
Green bonds took the lion’s share of the aligned volume, making up 62%. They reached a significant total of USD278.8bn in H1 2023, with February standing out as the most active month. This highlights the increasing reliance on green bonds as a preferred means of securing sustainable finance.
The Euro continued its dominance as the leading currency for aligned GSS+ deals. It accounted for a significant 47% of the H1 volume, marking its sixth consecutive year of topping the currency chart in this regard.
However, not all regions experienced growth in this sector. The volume of aligned GSS+ originating from the United States saw a substantial drop by 39% in H1 2023. This decline could be attributed to the country’s anti-ESG political rhetoric, which could have deterred potential issuers.
In a testament to the global focus on climate change and sustainability, the green and other labelled finance markets were able to hit the $4 trillion mark. This significant milestone underlines the potential for rapid expansion in the green finance sector, as more businesses and governments align their strategies with sustainable goals.
The GSS bond market also experienced impressive growth. There was a 40% increase in new issuances in H1 2021 compared to H1 2020. European issuers were at the forefront of this surge, accounting for 55% of the market.
The top three sectors which dominated the GSS bond issuance were government, financials, and utilities. These sectors constituted 70% of the total, underscoring their role in driving sustainable finance. Among the issuers, the European Union emerged as the largest single issuer, reinforcing its commitment to sustainability and green finance.
The figures illustrate a clear trend of growing adoption of GSS+ finance volumes as a means of supporting sustainable development. Despite the challenges, the sector is poised for further growth and expansion, driven by global commitment to climate change mitigation and sustainability.
