Green loans were the second most popular at $109 billion
Climate Change: As the world moves towards green capital investment, there has been a boom in sustainable debt products.
Traditional modes of financing are now coming with Environmental, Social, and Corporate Governance riders, and emerging markets such as India are increasingly tapping into such resources.
However, issuances have remained concentrated in high-income countries.
“Global sustainable debt issuance has experienced exponential growth, reaching a record $730 billion in 2020, with high-income countries accounting for 77 percent of the decade’s headline figure,” according to a report by the Climate Finance Leadership Initiative (CFLI). The CFLI, formed by former New York Mayor Michael Bloomberg, has in its members Allianz Global Investors, AXA, Bloomberg, Enel, Goldman Sachs, Japan’s Government Pension Investment Fund, HSBC, and Macquarie.
According to the report, titled ‘Unlocking Private Climate Finance in Emerging Markets: Private Sector Considerations for Policymakers’, China leads the pack in emerging markets in raising such debt. It has raised $165 billion in green funds between 2011 and 2020. “However, the number of emerging economies tapping sustainable markets has more than doubled over the past decade, with issuers from India and Brazil raising $33 billion and $31 billion, respectively.”
In 2020, 32 emerging market countries issued sustainable debt products — twice as many as five years prior — even as the overall emerging market issues fell 17 percent YoY.
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