About $544.3bn worth of sustainable finance bonds were issued during 2020 — more than double the amount of this type issuance in 2019, according to Refinitiv data.
Green bonds (where the proceeds support environmental causes) accounted for more than half of the total, reaching an issuance volume of $222.6bn. This is the highest annual total on record and a 26% increase compared to 2019.
However, the biggest issuance increases were seen in the social and sustainability bond categories. Some $164.2bn worth of social bonds (where the use of proceeds are invested in projects with positive social outcomes) were also issued. This is almost 10 times as much as in 2019, with social bond issuance accounting for 30% of the sustainable finance bond market during 2020, compared to 5% during 2019.
Sustainability bonds (where the proceeds support a combination of green and social outcomes) reached an issuance total of $127.6bn, more than triple the 2019 total.
Issuance in each of the two categories topped $100bn for the first time in 2020, with a significant volume of bonds issued to tackle the health and economic consequences of the Covid-19 pandemic driving up this total.
Sovereign, supranational and agency (SSA) issuers accounted for 56% of overall sustainable finance bond activity during 2020, raising $304.5bn worth of bonds, with many sovereigns and multilaterals issuing Covid-19-related securities. This marked a substantial increase on the $71.9bn printed by SSA issuers in 2019, and marks a departure from a typical year, where corporate issuers would account for the lion’s share of the market. For instance, in 2019, SSA issuance accounted for less than a third of the market.
The World Bank was the most prolific sustainable finance bond issuer in 2020, printing 43 sustainable finance bonds and raising $62.2bn. France raised the next highest total, with $49.3bn raised via 17 issuances, and the EU raised $47.3bn via three jumbo issuances.
JPMorgan claimed the top spot as the leading sustainable finance bond underwriter for the year, with 6.3% market share by issuance volume, an increase of 2.5 market share points compared to a year ago. It acted as a bookrunner on 131 issuances, worth $34.3bn. BNP Paribas, supporting 118 issuances worth $31.4bn; and Crédit Agricole, with 106 issuances worth $31bn, followed.
In other areas, merger and acquisition (M&A) activity involving sustainable companies reached $32.3bn during 2020 — a 9% decrease compared to 2019. However, this was broadly in line with the overall decrease in general global M&A activity during 2020.
Equity capital markets issuance for sustainable companies totalled $13.8bn during 2020 — a 65% increase compared to 2019 and an all-time record.
