Shares (photo by vecteezy)
S&P estimates today that the volume of green bond issuance will exceed the volume of regular bond issuance. What this means is that the scope of investments in companies that avoid environmental pollution will increase and this is a significant figure that concerns polluting companies.
We will explain that there are different types of green bonds, with one of the common types being the raising of money by companies that do not pollute at all, let’s say clean energy and so on. The second type that is no less interesting is the green issues of the financial companies, which is actually raising money that, with a certain leverage, will be transferred as an asset/investment in companies no pollutants
More in-
In Israel, it was Bank Hapoalim that last year raised over a billion dollars in green coco bonds, which means that the billion dollars that the bank raised will be transferred as loans and/or investment in companies with characteristics that maintain the quality of the environment at least at a reasonable or adequate level.
From S&P data it appears that the expectation is for a 5%-17% increase in the volume of issuance of sustainable bonds – green bonds, social bonds, sustainability bonds and bonds linked to sustainability indices (together – sustainable bonds) S&P estimates that sustainable bond issuance activity will resume growth during 2023 and the volume of issuance is expected to reach approximately $900 billion-$1 trillion, close to a peak of $1.06 trillion in 2021.
“Three factors could drive growth or influence a decline in issuance activity: policy initiatives, investment levels for climate adaptation and climate resilience, and the ability of issuers to address concerns about the credibility of certain types of sustainable debt. Green bond issuances will likely continue to be the dominant issuances .
“Sustainability-linked bonds (SLBs) are at an inflection point – if questions regarding the reliability of a sustainability index-linked bond are not answered to the satisfaction of investors and other critics, this could be an obstacle to the issuance of sustainability index-linked bonds, which have been a growing segment among bonds sustainable”.
S&P estimates that total global bond issuance in 2023 will grow only modestly. However, S&P believes that faster growth for sustainable bond issuance will lead to greater market share for this asset class in all regions and activity sectors. We believe that sustainable bond issuance of companies, financial services and the US and international public finance sectors is expected to make up 14-16% of all bond issuances in 2023.
“In 2023,” say S&P, “a renewed growth in the issuance of sustainable bonds is expected at the global level, and in our opinion, expansion in this activity can continue for many more years. We expect that the growth of 2023 will exceed that of the global bond market as a whole. The asset classes of sustainable bonds remain an important tool that will help drive investments in meeting climate and sustainability goals, and in our opinion, issuers and investors are eager to use these tools.”
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