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ESG bond issuance set a quarterly record of $270bn, over 4x higher than $65.6bn in Q1 2020 and 50% higher than the previous record of $180bn in Q4 2020. In combination with ESG loans, total ESG issuance stood at $360bn for the quarter ended March. IFR notes that of the total $2.5tn in global bond issuances in Q1, ESG bonds made up 11% vs. 9% in the preceding quarter and 3% in Q1 2020. Sustainability linked bonds (SLBs) saw ~$10bn in issuances, over half of it in the EMEA region. “2021 has been dubbed the year of the SLB by a lot of market participants, so we expect that to continue to rise,” said Amrita Ahluwalia, a capital markets lawyer at Linklaters.
Green bond issues were at $125.5bn, social bonds at $91.3bn and sustainability bonds (green and social) at $43bn. EU dominated both the green and social bond spaces with issuance of $74bn and $82.5bn respectively while US had a higher issuance of sustainability bonds at $16.8bn. Analysts expect ESG issuance to continue rising through the rest of the year. “It’s been a particularly strong quarter for ESG. I’ve never really seen the market like this” said Trisha Taneja, head of ESG advisory for capital markets at Deutsche Bank.
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