Global Green Bonds: 2019 full year review
Green bonds set another record year in 2019 spurred by strong demand for responsible investment
TOTAL proceeds raised from green bonds issued globally in 2019 reached US$173.4 billion, a 31.0% increase from a year ago, as the number of issues grew 31.5% and accounted for 2.2% of the global bonds proceeds, according to a report, Global Green Bonds: full year 2019 review, published January 16 by Refinitiv.
Total proceeds raised from global ESG (environmental, social and governance) bonds issuance in 2019 was US$218.8 billion, up 39.4% from last year, which accounted for 2.8% of the global bonds proceeds.
Green bonds gained momentum as diversity of issuers (both sovereign & corporate) continued to grow as the market share to global bonds has more than tripled since 2015.
Issuance of green bonds in three key regions – Europe, Asia Pacific & Japan and the Americas – witnessed fast-growing activity, as the markets innovated to meet investor appetite for sustainable investments.
Since the first green bond was issued in 2007 by the European Investment Bank (EIB) to raise funding for climate-related projects, Europe remains the largest regional market offering green bonds, with 54.8% market share, raising US$95 billion in 2019, up 41.4% from a year ago.
France raised a total of US$17.1 billion in 2019, up 43.8% in proceeds from last year, with a 9.9% market share. French electric utility power Engie SA is currently the most active non-financial corporate green bond issuer worldwide, raising US$2.8 billion from two green bond sales in 2019. Germany, with 9.5% market share, saw its record offering from KfW Bankengruppe’s US$3.4 billion green bond issuance in 2019.
Asia Pacific including Japan continued its expansion, capturing 27.5% market share, and raised a record high of US$47.6 billion, up 3.6% from a year ago. The surge was led by China after it emerged as a key player since 2016 and accounted for the majority of the global green bonds proceeds with 13.2% market share and taking the lead in global green bonds with US$22.9 billion in proceeds, down 21.4% from a year ago.
ICBC was the most active Chinese green bond issuer, raising a total of US$5.5 billion from six green bond offerings in 2019. Japan started to pick up issuance in 2018 and raised US$6.7 billion in 2019, up 78.8% from 2018.
Southeast Asia green bonds totalled US$6 billion in 2019, a 55.6% growth from a year ago. Elsewhere in Asia, South Korea saw a 243.6% jump in proceeds from last year to US$5.1 billion in 2019, driven by LG Chem’s US$1.6 billion issuance. Hong Kong raised US$1 billion from its inaugural sovereign green bond.
The United States green bond offerings gained momentum and reached US$19.6 billion in 2019, a 41.1% increase in proceeds from a year ago, with a 11.3% market share. The US took second place as the most active issuer nation this year, bringing the total green bond offerings from the Americas to US$29.9 billion, up 61.5% from 2018. Apple Inc’s US$2.2 billion offering is the biggest US non-financial corporate green bond issuance in 2019.
As the growth of the green bond market continues unabated, the types of issuers have grown increasingly diverse as well. Aside from government and financial institutions, corporate borrowers from various sectors such as energy & power, technology, retail, telecommunications, etc., have continued to emerge since 2016. Non-financial corporate green bonds almost doubled in proceeds, as companies became increasingly active.
Government and financials dominate with 64% combined market share as more sectors tap the green bond market in 2019, with energy & power gaining market share after green bonds increased 95.6% year-on-year. Government grew 16% in proceeds from 2018, capturing 32% market share in 2019. Financials jumped 15% in proceeds as the number of green bond offerings grew 36%. Non-Financials also gained market share, capturing 36% in 2019, from 24% in 2018.
Belt & Road nations took the green route and tapped the green bond markets, raising US$57.4 billion in 2019. BRI participating nations raised US$57.4 billion in green bonds, up 12.9% from 2018. In 2019, China accounted for 40% of the green bond proceeds raised by Belt & Road nations, followed by Italy and South Korea.
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