It’s Getting Easier Being Green: Green Bonds Gaining Steam in 1Q21

It’s Getting Easier Being Green: Green Bonds Gaining Steam in 1Q21 July 01, 2021 Downloads Download Article Share Green bonds have been touted in recent years as tools to advance technologies, finance clean energy projects, and promote economic and climate resiliency. Cumulative global debt outstanding that meets sustainability criteria hit $1 trillion in 2020, with issuers expecting to sell an additional $375 billion of green bonds in 2021, almost 40% growth year-over-year.1 Once a niche market, green and sustainability bonds are becoming mainstream. This year’s expected market growth is being driven by both issuers and investors alike: ESG considerations have become more important for investors, while companies are seizing opportunities to make investments that can help to meet climate goals and requirements. Green Bonds 101 The European Investment Bank and The World Bank issued the first-ever green bond in 2007.2 Since then, the market has seen new structures evolve, providing investors and issuers with options for measurement, evaluation and benchmarking. While investors use the term “green bond” to describe the entire category of sustainability-related bonds, it is important to understand some of the key differentiators among commonly used structures. The two most active categories of sustainability-related bonds are green bonds and sustainability-linked bonds (SLBs). Green bonds are generally structured similarly to standard bonds, but proceeds are allocated to eligible green projects. Green bonds therefore provide debt financing exclusively to projects that produce environmental benefits. These projects range from energy-efficiency building upgrades to renewable-energy projects such as wind or solar farms. Download the full report for more details Footnotes: 1: Record $269.5bn green issuance for 2020. Climate Bonds Initiative. (2021, February 15). https://www.climatebonds.net/2021/01/record-2695bn-green-issuance-2020-late-surge-sees-pandemic-year-pip-2019-total-3bn. 2: Trends in sustainable bonds issuance and a look ahead to 2021. Environmental Finance. (2021, February 22). https://www.environmental-finance.com/content/the-green-bond-hub/trends-in-sustainable-bonds-issuance-and-a-look-ahead-to-2021.html. Related Insights U.S. Solar Supply Chain: Business Implications from U.S. Government Actions Against China Read Article Six Strategies for Building the E in ESG Read FTI Journal Published July 01, 2021 Key Contacts Christopher R. LeWand Global Practice Leader Power, Renewables & Energy Transition (PRET) Miriam Wrobel Senior Managing Director, Global Leader of Environmental, Social and Governance (ESG) and Sustainability Carter Atlamazoglou Managing Director Downloads Download Article Most Popular Insights 2026 Private Equity Value Creation Index Payment Firms Under Scrutiny Many Global Consumers Are Avoiding the U.S. Why Isn’t There More Concern About Recession Risk? Corporate Sustainability Report Sign up to get access to FTI Consulting Insights Subscribe