Green bond sales surged to $356 billion in the first half of 2024, marking the busiest six months since the market’s inception, according to data from Bloomberg. After a robust first quarter driven by both corporate and government issuances, which saw sales reach $191 billion, second-quarter sales slowed to $165 billion.
Bloomberg data showed that sustainable bond issuance overall set new records in Q1 2024, bolstered by government bond issues and transition bonds in Japan. Impact bond issuance (including green, social, sustainability, and sustainability-linked bonds) was stronger in the first quarter than the second, totaling $328 billion, a 7.5% increase compared to the same period last year.
The largest green bond sale in the first six months of 2024 was by the Italian government in May, totaling €9 billion. Japan debuted its green transition bond with three transactions in the first half of the year, amounting to over $12 billion as part of a plan to significantly increase issuance over the next decade. Other significant government issuers included France, Germany, Australia, Canada, and the United Kingdom, contributing over $140 billion in sales from January through June and comprising the largest sector of green bonds issued.
Social bond sales in Q1 rose sharply to $52 billion, up 33% from the same period last year. However, sales tapered in the second quarter, leaving the total sales for the first half of the year flat at $82 billion compared to the same period last year, significantly lower than the $155 billion sold during the same period in 2021. Nonetheless, volumes remained higher than pre-pandemic levels. The largest social bond of the year so far was issued by La Caisse d’Amortissement de la Dette Sociale (CADES) of the French government, totaling €4 billion. The Icelandic government became the first sovereign borrower to issue a labeled gender bond, focusing on gender equality.
Sales of sustainability bonds hit record levels in Q1, reaching $72 billion, up 20% compared to the same period last year. The half-year figure was also up, at $124 billion, marking a 10% increase over the same period last year and just shy of the record set in H1 2021 at $129 billion. The International Bank for Reconstruction and Development (IBRD) issued the largest sustainability bonds in the first six months of 2024, totaling $5 billion.
Issuance of sustainability-linked bonds (SLBs) continued to decline, with Q1 sales dropping more than 50% to $12.4 billion, the lowest first quarter since 2020. Half-year volumes followed the same downward trend, falling 47% to $22 billion compared to the same period last year. Enel, the Italian utility, issued the largest sustainability-linked bond of the year to date, at $1.25 billion in June, with a total of four SLBs issued in the first half of the year totaling approximately $4 billion.
Bloomberg’s Global Aggregate Green, Social, and Sustainability (GSS) bond indices, which were voted the best Sustainable Index of the year by Environmental Finance, provide investors with a robust measure of the global market for fixed income securities issued to fund projects with direct environmental and/or social benefits. The year-to-date return for the GSS index stands at –3.46%, 14 basis points higher than the Global Aggregate Index, highlighting improved returns for investors focused on sustainability.