The Green, Social, and Sustainability (GSS) Bonds market has surpassed $5trn (£3.9trn) in cumulative issuance, according to the latest quarterly GSS report by MainStreet Partners.
The report – Q3 2024 GSS Bonds Market Trends – found green bonds represent 57% of total GSS bond issuance year to date.
In the first half of 2024 alone, Green bond issuance reached a record-breaking $356bn (£274bn) – the most active period for green bonds since the market’s inception. This comes as Europe continues to dominate the market, contributing $291bn (£224bn) in issuance, a 13% year-on-year increase.
The report also explored how the current regulation will affect funds that invest in GSS Bonds. It found the European Securities and Markets Authority (ESMA) guidance on the use sustainability-related terminology in fund names will require fund managers to align their portfolios with either the Paris-Aligned or Climate Transition benchmarks. However, this should have limited impact on many portfolios.
Jaime Diaz-Rio Varez, research associate at MainStreet Partners, said: “Our data highlights the organic and robust growth of the GSS bond market. Record-breaking issuance this year underlines the critical role that GSS bonds play in financing the transition to a greener, more sustainable economy.
“For this growth to keep its momentum, it is vital that regulators continue in their mission to create a transparent environment for investors, but also, it is equally as importantly to create a supportive environment for transitioning issuers.”
