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Sales of green bonds thus far in 2017 are approaching US$50 billion

By James Langton |

 

The global "green bond" market continues to enjoy strong growth as both investors and issuers increasingly embrace the phenomenon, J.P. Morgan Chase & Co. reports.

Green bond issuance came in at US$87.7 billion in 2016, up from US$500 million in 2012, when the first green bond came to market, J.P. Morgan reports. So far this year, green bond sales are approaching US$50 billion, it notes.

"The market is constantly hitting new milestones," J.P. Morgan says. It also notes that the first sovereign green bond was issued in late 2016 and the largest green bond to date was issued earlier this year (a €7-billion offering by the government of France).

With the development of this market, "Countries, local governments and companies are more able to raise debt in the capital markets to finance environmental and sustainability projects than ever before," notes Marilyn Ceci, head of green bonds at J.P. Morgan.

Green bonds are aimed at attracting investors who are not only looking for returns, but also protecting the environment, the firm says. "They want to have a positive impact," Ceci says.

Investors' interest about the environment is extending into other socially prominent areas, such as bonds aimed at financing low income housing, and educational opportunities for youth and women-owned business, adds Ceci.

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