Despite acute financial market turmoil, global sustainable bond issuance held up relatively well in the second quarter and is expected to rise in the second half, according to a new report from Moody’s ESG Solutions.
In the second quarter, global sustainable bond volumes were down by 19% from the same quarter last year to $225 billion (all figures in U.S. dollars) — but that represented a 2% increase over the first quarter of 2022.
Green bonds led the way in the second quarter with $136 billion of issuance, which was up by 28% from the first quarter and in line with the same quarter in 2021.
The rebound in green bond volumes was followed by $35 billion of sustainability bond issuance, $34 billion of social bonds and $20 billion in sustainability-linked bonds.
While the quarter was weaker overall compared with the same period in 2021, the report noted that sustainable bonds held up better than the rest of the market.
Sustainable bond volume accounted for 15% of global issuance in the second quarter, which is the highest share on record, Moody’s said.
“The sustainable bond market is therefore proving resilient, suggesting a high likelihood of a swift bounce in volumes once market conditions improve,” the report said.
Additionally, the firm said that the fast-evolving climate policy landscape will also help drive the sustainable bond market.
As a result, the firm said it expects sustainable bond volumes to rise in the second half. It continues to forecast around $1 trillion of total issuance for the full year.