• Over 350 green bonds issuances launched since the start of 2020, according to analysis by global law firm Linklaters
• $168.2 billion raised by companies, financial institutions and governments ­­­_­­­– up from $128.3 billion for the same period last year
• Financial services, energy and real estate biggest sectors for green bonds issuances

A total of 366 green bonds issuances have been launched globally since the start of the year with a total of $168.2 billion raised by companies, financial institutions and governments, according to new analysis by global law firm Linklaters. Following a record-breaking year in 2019 with 504 issuances and $187.8 billion raised, the data suggests that 2020 has seen continued appetite amongst investors for sustainable investments.

Green bonds finance environmentally friendly projects, including energy efficiency, pollution prevention, clean transportation and new green technologies.

Richard O’Callaghan, Capital Markets partner at Linklaters, commented: “Green bonds have seen continued momentum in 2020 despite the global pandemic, with record levels raised to fund the sustainability ambitions of issuers. This has been met with high levels of interest from investors who are eager to play their part in supporting environmentally-friendly projects.”

Finance, energy and real estate fuel growth

The financial services industry, including banks, asset managers and credit institutions, have led the way with green bonds issuances in the first nine months of the year, raising a total of $56.1 billion in 144 issuances. Energy and real estate follow with $27.7 billion and $15.8 billion raised in these sectors respectively.

Amrita Ahluwalia, Capital Markets lawyer at Linklaters, commented:

“Investors continue to look for ways to be more sustainable. This has enabled green and sustainable bonds to gain significant market traction. Regulatory initiatives, like the EU Green Bond Standard, will go some way in setting market-wide principles to help prevent greenwashing which will likely prompt even greater appeal once adopted.”

Meanwhile, governments and international and national agencies have embarked on record levels of debt-raising to finance green projects, with $52.5 billion raised in 97 issuances, compared to $39.4 billion for the same period in 2019.

Sweden takes top position in Europe

Sweden has seen the largest number of green bond issuances in Europe, with a total of 61 so far this year raising $7.1 billion, with nearly a third (62%) taking place in the real estate sector. In 2019, it ranked the highest country globally for the number of green bonds issuances, spurred on by the government’s ambition to transform Sweden into one of the first fossil-free welfare countries.

Elsewhere, the US tallied up a total of 69 issuances raising a total of $29.0 billion, followed by Japan with 55 issuances with $5.9 billion.

Linklaters has been at the forefront of the growth in the green bonds market, advising on some of the leading offerings in recent years, Russian Railways (Russia and the Commonwealth of Independent States’ first), Link Real Estate Investment Trust (the world’s first green convertible bond in the real estate sector), the Government of Hong Kong (its inaugural US1bn Green Bond, listed on both the London Stock Exchange and the Hong Kong Stock Exchange), Egyptian Ministry of Finance (the first sovereign green bond in the Middle East and Africa region, listed on the London Stock Exchange (LSE) and admitted to the LSE’s dedicated Sustainable Bond Market) and DTEK Renewables (the first ever green bond issuance by a Ukrainian issuer).

Linklaters has also led the development of the related sustainability-linked bond market, advising on recent issues by Suzano (the first bond of its kind to be aligned with the ICMA’s sustainability-linked principles published in June 2020), Novartis (the first sustainability-linked bond to incorporate social rather than environmental targets and the first offering of sustainability-linked bonds in the healthcare sector) and ENEL (the first sustainability-linked bond in Europe).

Linklaters’ green bond practice and experience spans its European, North American and Asian offices and draws on the support of the firm’s market-leading corporate, environment and climate change, energy and financial regulation practices.