The global green bond investments are projected to double and reach $1 trillion for the first time in a single year by the end of 2022, a recent survey by the Climate Bonds Initiative revealed.
As per the survey, the Climate Bonds Initiative, a London-based non-profit body that encourages investment in the low-carbon economy, predicts that green bond issuance will reach a record high of $500 billion this year, up from $297 billion recorded last year.
The survey was conducted based on 353 responses from companies, asset owners and investment managers, development banks and regulators, as well as ratings and verification service providers.
By the fourth quarter (Q4) of next year, the green bond investment would pass $1 trillion, the largest group of survey participants, accounting for a quarter of responses, stated.
Nearly, 13 percent of respondents of the survey thought that the $1 trillion milestone would be passed in the fourth quarter of 2023, 12 percent said that it would be passed in the second quarter of 2023 and 10 percent predicted the third quarter of 2023. The rest thought the milestone would be reached further out.
“The long-awaited $1 trillion milestone is now a market reality, whether at the end of 2022 or during 2023. But the climate crisis grows. It’s time to lift our sights and aim higher. $5 trillion in annual green investment by 2025 must be the new mark for policymakers and global finance to achieve,” said Mr. Sean Kidney, chief executive of the Climate Bonds Initiative.
Currently, the financial institutions and corporations are under severe pressure from investors to improve their environmental, social and governance (ESG) activities, with the issuance of so-called green bonds to raise money for low-carbon projects becoming increasingly popular.
Although they make up a small fraction of the overall debt market, green bonds are attracting attention because trillions of dollars of capital are required from the public and private sectors to meet emissions-reduction targets.