ESG Bond Sales Sprint to $1 Trillion as Investors Force Change

Global issuance of bonds for environmental, social and governance goals look set to hit $1 trillion for the first time ever this year. That’s more than double what was sold in all of 2020 as more borrowers are pushed to sell ethical debt by investors.

New issuance of green, social, sustainability and sustainability-linked bonds from corporations and governments worldwide has already topped $575 billion so far this year, $100 billion more than all of 2020, according to data compiled by Bloomberg. Bankers are bracing for an even busier second half, which was reflected in more deal announcements in Asia on Wednesday.

“What began with ‘why should I issue?’ is now ‘why aren’t you?’,” said Marilyn Ceci, global head of ESG debt capital markets at JPMorgan Chase & Co., one of the biggest underwriters of sustainable bonds. “Your absence in the market says something now,” said Ceci, who expects issuance volume to double by year-end, in a phone interview.

A municipal government in western Japan, Mie Prefecture, is planning to sell a yen-denominated green bond. A local real-estate trust, Mori Hills REIT Investment Corp., priced green debt in the Japanese currency. Chinese real-estate company Minmetals Land Ltd. on Wednesday mandated for a possible sale of sustainable dollar notes, while India’s Adani Electricity Mumbai Ltd. was planning a potential sustainability-linked bond offering in the U.S. currency.

Read more: Asia’s Robust ESG Debt Issuance May Reach $600 Billion in 2021

“Every issuer is going to want to be able to demonstrate that they have a sustainable business model,” said Philip Brown, head of public sector debt capital markets at Citigroup Inc. “What the asset owner wants, the asset manager provides, and the issuer has to respond if they want to reach these portfolios,” Brown said in a phone interview.