February 2025
Analysis of ICE’s sustainable bond data confirms the strong resurgence of issuance noted in H1 2024 (see ICE Sustainable Bond Analysis - First Half Year 2024) was maintained in the second half of the year. Overall issuance increased 20% year-on-year to a record high in 2024, topping the $1 trillion mark for the first time.
Source: ICE
Both H1 and H2 issuance saw new records, exceeding the previous highs of 2021. Issuance was slightly lower in H2 compared to H1, consistent with the seasonal pattern for issuance since 2021. However, H2 issuance relative to H1 was stronger last year than in the previous three years, driven by a record level of issuing activity in Q3, propelled by supranational and Asia issuance. Chinese issuance dominates at the country level, responsible for 10.6% of total issuance in 2024. Supranationals, meanwhile, represented 13.2% of issuance last year.
The approach of climate targets (2030 interim targets and Net Zero 2050 targets) set by both governments and corporates is one potential explanation for the renewed acceleration of sustainable bond issuance, as issuers look to fund projects to meet their commitments.
[Chart 2] Maintaining momentum - new highs for global sustainable bonds issuance in first and second half of 2024 ($bn)
Source: ICE
All categories of sustainable bond provided a positive contribution to 2024 record issuance except sustainability-linked bonds (SLBs), which continued their recent downward trend. While green bonds continued to dominate, (representing 57.7% of all sustainable bond issuance in 2024), in terms of percentage increase, transition bonds grew their market share the most out of all sustainable bond cohorts.
Source: ICE. Note: Chart shows the percentage share of issuance of each category of sustainable bond by amount ($), giving a high-level indication of the types of projects attracting funding. Given SLBs do not have a specific use of proceeds they are not included in this analysis.
Transition bond issuance increased by over 500% year-on-year in 2024, taking the total issuance to a record $18.8bn. While this category represented only 1.85% of total sustainable bond issuance, its rapid growth is consistent with the development of the transition investing theme which has gathered momentum over the past year (Funding brown to achieve green).
Asia is the main source of transition bonds, with significant issuance by the Japanese government last year (the first transition bond issues by a sovereign) as part of country’s long-term transition plans, suggesting further such issues to come. Japan represents 93.3% of total transition bond issuance, with the bonds representing 27.7% of Japan’s total sustainable bond issuance. This activity could encourage further growth of the category as the Japanese government has set a target of providing ¥20trn of financing for the country’s green transition.
Source: ICE
The transition bonds issued over the past year are mainly focused on clean transportation, renewable energy and energy efficiency, with the Japanese government identifying 22 areas of investment for the funds raised by its bond issuance, including the development of next generation climate technologies.
All regions contributed to the growth in sustainable bond issuance in 2024. While Europe, Middle East and Africa (EMEA) still account for the largest share of issuance at 41%, Asia-Pacific (APAC) issuance has continued to grow and represented 30% of overall issuance last year, further closing the gap with EMEA. APAC is the only region that has maintained consistent year-on-year growth of sustainable bond issuance over the past five years, avoiding the dip of issuance seen by other regions during 2022.
Source: ICE
Source: ICE
After two years of decline, 2024 saw North American sustainable bond issuance jump by 60%, taking the region’s share of global issuance to 12%, just behind the levels of supranationals.
The majority of North America’s issuance, including U.S. municipal debt issuance, has focused on green bonds over the past year, with 64% of the region’s issuance in this category, representing 13% of the total green bond issuance globally last year.
Source: ICE
Green bonds continue to dominate, with record issuance in 2024. EMEA accounted for the majority of green bonds issued last year (51.7%) followed by APAC (27.2%) and North America (13.3%).
Corporates are the main issuers of green bonds, in contrast to most other categories of sustainable bonds where sovereigns and quasi-government agencies are the main issuers.
Source: ICE
Financials stand out as the largest corporate issuers of green bonds over the past year with 30.8% of the issuance in the category, representing 63.3% of the financial sector’s total sustainable bond Issuance.
Source: ICE
The establishment of blue bonds as their own asset class continued in 2024, with a 10.6% year-on-year issuance increase, although the category remains marginal, representing only 0.24% of the total sustainable bonds issued last year. Blue bonds are the only category of sustainable bonds that have achieved continuous year-on-year growth over the past three years, avoiding the dip of issuance suffered by other categories in 2022, albeit from a very low base. Once again, APAC is the main regional issuer, but interestingly, rather than sovereigns/quasi-government agencies, corporates are the main issuers of blue bonds.
Source: ICE
There was a resurgence in social bonds in 2024, with 78% of issues being U.S. municipal bonds. Korean issuers - in particular, Korean mortgage bonds - also represented a significant proportion (14%) of issuance.
In spite of the revitalization of social bonds last year, issuance remains below the 2021 peak. Indeed, despite a 31.9% year-on-year increase in issuing activity, social bonds are the only category of sustainable bonds (excluding SLBs) which failed to match or surpass the 2021 peak last year.
Source: ICE
Finally, while all other categories of sustainable bonds enjoyed a rebound in issuing activity last year, sustainability-linked bonds (SLBs) continued their issuance slide. 2024 represented the second consecutive annual decline for SLBs, leaving issuance 57.3% below 2022 levels. The decline is evident throughout last year, with second-half issuance 14% below issuance in the first half. In 2024 SLBs represented just 3.9% of total sustainable bond issuance.
The decline of SLB issuance has coincided with increased scrutiny and criticism of the climate targets attached to the bonds, which have often been viewed as unambitious.
Corporates were the largest issuers of SLBs in 2024, representing 87.1% of issuance, with the utilities and industrial sectors the largest participants. However, both sectors showed a sharp decline in SLB issuance in the second half of the year, down 70.1% in the case of utilities and 25.3% for the industrial sector compared to issuance in the first half of 2024.
Source: ICE
Blue bonds
Invest in water and wastewater management, marine ecosystem restoration, sustainable shipping
Green bonds
Invest in environmental and climate-related projects, renewable energy
Social bonds
Invest in social projects, affordable housing, job creation, healthcare access, education
Sustainability bonds
Invest in a combination of green and social projects
Transition bonds
Invest in reducing the issuer’s environmental impact and transition to sustainable business practices
Sustainability-linked bonds
Link the bond’s coupon to the issuer’s progress in meeting specific sustainability goals
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