Quarterly Highlights:
- USD29.7bn of issuance*, 79 issuers from 27 countries
- 293 green bond issues with 212 from the USA, 18 from China and 13 from Sweden
- 46 market entrants from 18 countries bring the total number of green bond issuers to 553
- 52 green bond markets reached, with the first issuer from Uruguay debuting in Q3
- 4th tap of the Republic of France’s sovereign Green OAT, taking the total to EUR14.8bn (USD16.7bn)
- Natixis leads Quarterly Green Underwriters Table followed by Cit and BAML.
Green bonds in Q3 2018 totalled USD29.7bn, a 23% drop compared to Q3 2017. Looking at issuance since the beginning of the year reveals a more reassuring trend, with the cumulative annual issuance for 2018 at USD108.3bn less than 1% behind the 2017 figures for the same period.
Q3 volumes were driven by both banks and corporates, which accounted for 18% each. Government-backed entities were also active in the market representing 16% of the total, with issuance equally split between developed and emerging markets.
As of Q3 2018, USD66bn worth of green ABS have been recorded in the CBI Green Bond Database, and that represents 14% of cumulative green bond issuance. Covered bonds account for just under 2% of the market with USD7bn, while other secured bonds (including debentures) represent a 1% share of cumulative issuance at USD3.8bn. An in-depth analysis of the diverse bond structures to which the ‘green’ label has been applied to date is available on pages 22-27 of our recently released flaghsip State of the Market 2018 report.
State of the Market 2018: The scale is there in Developed Markets but where are the green bonds?
Climate Bonds’ recently launched Bonds and Climate Change: the State of the Market 2018 report identified a climate-aligned bond universe of USD1.45tn, made up of USD1.2tn from fully-aligned, strongly-aligned and green bond issuers, plus USD250bn outstanding bonds from US Muni fully-aligned issuers.
Green bonds account for a third of the USD1.2bn total – or USD389bn – pointing to a large pool of issuers financing green infrastructure through unlabelled bonds. This highlights the extensive opportunities for growing and diversifying the green bond market.
As underlined by the recently published IPCC special report, upscaling investment flows directed towards financing the low carbon transition is an urgent imperative if we are to achieve net-zero CO2 emissions by 2050.
Developed markets account for 62% of aligned outstanding figures in the climate-aligned universe. Over 50% come from fully-aligned issuers, 15% from strongly-aligned issuers and 35% from green bonds.
The top 10 developed countries represent the majority of volumes (87%). If scale is what we are looking for, then this seems like a good place to start.
We picked the three countries with the largest bond markets among the top 10 DM ranking to highlight opportunities for catalysing green debt issuance: USA, UK and Japan. Read more on pages 3-4 of the Q3 summary.
Green Bond Second Party Opinion (SPO) league tables
CICERO is largest Second Party Opinion provider with Vigeo EIRIS ranking second for Q3 2018 volume.
Methodology note: The ranking is only for external reviews which are second party opinions. In addition, external reviews can be provided in the form of verification for Certified Climate Bonds, assurance reports and rating agency green bond assessments/evaluations.