The sustainable bonds market shows signs of consolidation

Sustainable bonds worth over USD 550bn were issued globally, in DM hard currencies, in the first 10 months of 2022. Despite the challenging market scenario, this figure confirms the solidity of an increasingly significant sector which includes bonds classified as Green, Social, Sustainability and Sustainability-linked, according to the market standards¹. European issuers account for more than half of the total and the Euro consequently remains the preferred currency of denomination internationally. At the same time, the global sustainable funds industry hit USD 2.2trn in September 2022, and European funds collected 80% of total assets (Source: Morningstar²).

While Green bonds remain the instrument of choice, sustainability-linked bonds are recording growing success among corporates, especially Europeans. This thanks to the opportunity given to issuers to demonstrate their commitment to achieving ESG objectives, while maintaining greater flexibility in terms of use of proceeds. For Green bonds, governments and supranational institutions will continue to be important drivers of growth in volumes. 

In this talk, Barbara Valbuzzi, Head of Market Strategy, IMI Corporate & Investment Banking Division of Intesa Sanpaolo, illustrates the current market conditions and the outlook for sustainable bonds.

_{¹ International Capital Market Association (ICMA) standards are among the most widely used by market participants
²  “Global Sustainable Fund Flows: Q3 2022 in Review”, Morningstar}