This article was written by Jonathan Gardiner, Sustainable Indices Product Manager at Bloomberg and Tom Freke, Fixed Income Data Specialist at Bloomberg.
Sustainable bond issuance topped more than half a trillion dollars in the first six months of 2023, buoyed by record levels of green bond issuance, according to data compiled by Bloomberg. Sustainable bond issuance from corporates and governments rose 18.6% compared to the same period in 2022.
Total impact (defined as green, social, sustainability and sustainability-linked) bond issuance in H1 was approximately $570bn. Significant-sized new issues from Germany and France in June helped the government sector account for the largest market share of these securities. Total issuance of sustainable debt in June was $82.8bn, with green bonds accounting for $53.6bn of the figure.
Sales of green bonds in the first half of the year rose 22.2% to $351.9 compared to the same period in 2022, the biggest ever half year of issuance, outstripping the previous record, set in H2 2021, when $296.6bn was issued. The Italian government issued the largest green bond of the year to date, in April, at €10bn.
There was also a rebound in social bond issuance. Sales of social bonds surged to $79.5bn, up 16.7% compared to the first half of 2022, with Q2 accounting for $42.6 billion of the total figure, which makes it the most active quarter and half year since the second quarter of 2021, when borrowers raised $59 billion. The bounceback in supply harks back to the previous big surge in social bond issuance, back in late 2020 and early 2021, when borrowers raced to fund relief for the impacts of the pandemic. La Caisse d’amortissement de la dette sociale (CADES), owned by the French government, was responsible for a quarter of all social bond issuance in the first half of 2023, including the largest single issuance of the year, in January, at €5bn.
Bloomberg’s Global Aggregate Green, Social and Sustainability (GSS) bond indices (webinar link) provide investors with an objective and robust measure of the global market for fixed income securities issued to fund projects with direct environmental and/or social benefits. The six month return for the GSS index is 3.79%, some 236 bps above that of the Global Agg Index, highlighting continued additional returns for investors with an appetite for sustainability-focused investment.
Summary of total GSS issuance H1 2023 (includes Gov, Corp, Muni & Mtgs)
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