The green bond market witnessed a record-breaking first half of 2024, with sales soaring to $356 billion, marking the busiest half-year since its inception, according to data provider Bloomberg.
According to the analysis by Jonathan Gardiner, sustainable indices product manager at Bloomberg, this surge underscores the increasing commitment of both corporates and governments to sustainable finance.
The first quarter of 2024 was particularly robust, with green bond sales reaching an impressive $191 billion. This momentum was largely driven by substantial issues from corporates and governments. However, the second quarter saw a slight dip, with sales totaling $165 billion.
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Overall, sustainable bond issuance also hit new heights in the first quarter, buoyed by government bonds and transition bonds from Japan. Impact bonds, which include green, social, sustainability, and sustainability-linked bonds, saw a stronger performance in the first quarter, totaling $328 billion, a 7.5% increase from the same period last year.
One of the standout issuances in the first half of the year was a €9 billion green bond from the Italian government in May. Japan also made significant strides with its green transition bonds, issuing over $12 billion through three separate transactions. France, Germany, Australia, Canada, and the United Kingdom were among the other notable government issuers, collectively accounting for more than $140 billion in sales from January to June.
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Social bond sales experienced a sharp rise in the first quarter, reaching $52 billion, a 33% increase from the same period last year. However, the momentum slowed in the second quarter, resulting in a half-year total of $82 billion. This figure, while flat compared to last year, is still significantly higher than pre-pandemic levels. The largest social bond of the year to date was a €4 billion issue by La Caisse d’Amortissement de la Dette Sociale, a French government entity. Iceland made history by becoming the first sovereign borrower to issue a gender bond, targeting gender equality.
Sustainability bonds also saw record levels in the first quarter, with sales hitting $72 billion, a 20% increase compared to the same period last year. The half-year total rose to $124 billion, just shy of the H1 2021 record of $129 billion. The International Bank of Reconstruction & Development issued the largest sustainability bond in the first half of 2024, totalling $5 billion.
The strong performance in the green bond market reflects the growing emphasis on sustainable finance as a critical tool for addressing global environmental and social challenges. As governments and corporates continue to prioritise sustainability, the momentum in green bond issuance is expected to persist.
