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Green bond issuance surges as investors hunt for yield

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on the Financial Times or enjoy below:

🗞️ Driving the news: Green bond issuance surged in the first quarter of this year, raising $273 billion, a record level
• This includes $195.9 billion from green bonds, a 43% increase from the previous quarter
• Notably, Constellation Energy issued the first US green bond for nuclear energy in March

🔭 The context: Investors are increasingly attracted to sustainable debt due to high interest rates and the reduced cost advantage of green bonds, known as the "greenium"
• Despite challenges in ESG stock funds, green bonds are gaining momentum, with a predicted issuance of $1 trillion this year

🌍 Why it matters for the planet: Green bonds finance environmental projects, aiding global efforts to combat climate change and transition to sustainable energy sources
• They also signal companies' and countries' commitment to environmental responsibility

⏭️ What's next: The demand for green bonds is expected to continue growing, especially as more high-emitting sectors seek financing for decarbonization projects
• Emerging markets and companies with significant sustainability plans are likely to increase their issuance of green debt

💬 One quote: "Investors want this, because even if you’re getting it [the green bond] at the same price . . . you’re getting the green label for free," said Alan Siow, co-head of emerging market corporate debt at asset manager Ninety One

📈 One stat: Green bond issuance jumped 43% on the previous quarter to $195.9 billion

Click for more news covering the latest on sustainable finance

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