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SEB projects sustainable finance issuance to hit $1 trillion in 2021

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Jordan Major

Swedish financial group SEB has projected that 2021 will record key milestones for the sustainable finance sector. In a recent report, SEB notes that the sustainable finance market is set to build on gains made from October and November this year. 

The report titled ‘The Green Bond: Pathways to Parisindicates that the value of the sustainable finance issuance has already hit almost $649 billion in 2020. It projects that by next year, the issuance will for the first time surpass $1 trillion. Most growth will be mainly from new sustainable loan types. 

SEB added that there is growth from the green bond market that has already surpassed the $1 trillion mark since inception. As of November 2020, the corporate sector was the largest sector for green bonds, with an issuance of $15.2 billion.

The figures have exceeded the total amount issued in 2019. Notably, four of the five largest corporate issuers in October and November came from European countries. 

The financial sector added $15 billion of green bonds in October and November, with the total volume on November 30 YTD standing at $77.9bn, which was slightly more than 2019 totals.

The green bonds are a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects.

Sustainable finance remains resilient in 2020

The current value is significant, considering that 2020 has been challenging for the financial markets. According to SEB Head of Research, Climate and Sustainable Finance Thomas Thygesen:

“This year was a challenging year in terms of green investment, but when we look back one day, I think it will also be the year when the transition to a fossil-free production system took off. The new technology paradigm is taking shape, and companies have started the race to become first-movers. This is the overriding theme in the latest issue of The Green Bond.”

SEB, which together with the World Bank developed the green bond concept in 2007/2008. They publish a report on green bonds six times a year.

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