Green bonds issuance in emerging markets jumped 34% year on year, hitting $135 billion in 2023, according to a new report from asset manager Amundi and IFC.
Meanwhile, the broader category of Global Green, Social, Sustainability and Sustainability-linked bonds (GSSS) issuance exceeded $1 trillion in 2023, matching the all-time high reached in 2021, against a backdrop of lower inflation expectations. It was driven by green bonds (up 15%) as well as emerging markets (45%).
The report showed the bounceback helped GSSS bonds account for 2.5% of global fixed income issuance in 2023, up from 2.2% a year earlier, with growth largely driven by governments and companies stepping up efforts to address climate challenges in developing economies.
Non-financial corporates remained the largest green bonds issuers in developed markets (36% of the total), while financial institutions continued to dominate in emerging markets. China remained the largest green bonds issuer in emerging markets, growing by 18% year on year, Amundi said.
The report suggested that growth in emerging market sustainable bonds issuance is set to continue through 2025, with Amundi forecasting 7.1% year-on-year growth for GSSS bonds and 7.5% growth for green bonds.
Susan Lund, vice president economics and private sector development at International Finance Corporation, said: “Financing sustainable projects in emerging market economies will require deeper capital markets to fund economic and energy transitions. To achieve these goals, substantial efforts must be made to ensure continued growth in the Global Green, Social, Sustainability and Sustainability-Linked bonds market, including enhancing regulations and standardising best practices.”
Yerlan Syzdykov, global head of emerging markets at Amundi, commented: “Over the medium term, we anticipate continued growth in green bonds issuance within emerging markets, driven by several factors: an acceleration of the energy transition, a competitive pricing advantage for issuers compared to developed markets, and favorable macroeconomic conditions, such as high nominal yields at a time of relatively slow growth, which typically favors fixed income over equities.”
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