10.29.2021

Green Bond Investment to Pass $1tr in a Single Year

10.29.2021
Green Bond Investment to Pass $1tr in a Single Year

Green bond investment in a single year is set to double and reach the $1 trillion milestone for the first time by the end of Q4 2022, according to a new Climate Bonds market survey conducted in late October.

Climate Bonds surveyed a pool of market actors drawn from the following categories: corporates, asset owners, asset and investment managers, development banks, regulators, ratings and verification service providers.

In a range from 2022 to 2025, Quarter 4 of 2022 was selected by the largest group of respondents (25%) as the quarter when green bond investment would pass $1trillion for the first time in a single year. Quarter 4 of 2023 (13%), Quarter 2 of 2023 (12%) and Quarter 3 of 2023 (10%) were the next most popular responses.

Sean Kidney, CEO, Climate Bonds Initiative:

“The long-awaited $1trillion milestone is now a market reality, whether at the end of 2022 or during 2023. But the climate crisis grows. It’s time to lift our sights and aim higher. $5trillion in annual green investment by 2025 must be the new mark for policy makers and global finance to achieve.”

“Capital allocation towards clean energy, resilient infrastructure, green transport, buildings and sustainable agriculture needs to accelerate into the multiple trillions, every year, rippling through both developed and emerging economies.”

“The climate capital gap still remains. $5trillion in annual green investment by 2025 is a real economy investment benchmark to judge progress in greening the financial system.”

Background

Total annual green investment (green bonds, green loans & green sukuk) in 2020 reached $297bn.

Climate Bonds Market Data for H1 2021 recorded green bond issuance at a new half-year record of $227.8bn.

At end Q3 2021, green bond issuance for the calendar year stood at $354bn. Climate Bonds is forecasting green bond issuance to reach a record half-trillion ($500bn) for CY 2021, an increase of our early January 2021 forecast of $400-450bn.

Transition to a net zero global economy necessitates a huge shift in capital across all sectors. Climate Bonds Initiative has long held the first annual trillion of green investment to be a crucial milestone in these efforts.

Source: Climate Bonds

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