Small green plant sprouting out of dirt
Sasi Ponchaisang / 123RF

Having weathered the initial negative effects of the Covid-19 outbreak, sustainable finance had a record third quarter, according to new data from Refinitiv.

Globally, sustainable bond issuance totalled US$154.8 billion in the third quarter, up 13% from the second quarter and more than double the same period in 2019.

Refinitiv said the third quarter marked the highest total in both proceeds and number of deals since it began tracking the segment in 2015.

In particular, green bond issuance “accelerated” during the period and generated an all-time record of US$76.5 billion from 171 issues.

Through the first nine months, sustainable bond issuance is also at record levels: US$357.5 billion, almost double the same period a year ago.

“Driven by an increase in capital raising by sovereigns, multilaterals and banks for Covid-19 relief and recovery efforts, the sustainability and social bond categories each surpassed US$30 billion for the second consecutive quarter,” it reported.

HSBC led the sustainable bond underwriting, followed by JP Morgan and Citi.

Equity financing has also increased this year. Sustainable companies raised US$9.7 billion in equity during the first nine months of 2020, up 38% from the same period a year ago.

Again, the third quarter produced record issuance of US$5.6 billion, which was almost triple the total in the second quarter.

The top equity underwriters so far this year are BofA Securities, Morgan Stanley and JP Morgan.

Refinitiv also reported that sustainable syndicated lending was essentially flat so far this year, with US$114.5 billion worth during the first nine months of 2020.

And, it said that M&A activity involving sustainable companies totalled US$21.6 billion in the year to date, up 7% from a year ago.

Goldman Sachs led the M&A activity, it noted.

“The global capital markets have been remarkably resilient this year and the growing presence of sustainable businesses, innovative structures and use of proceeds will be a hallmark of 2020,” said Matt Toole, director deals intelligence at Refinitiv, in a release.