Markets

Global green bond supply to jump 50% in 2021 – NN IP

The global green bond market is forecast to grow by €300m in 2021, supported by the publication of the final version of the EU’s green bond standards and bond issuance from the EU itself, as well as other sovereigns, says Dutch asset manager NN Investment Partners.

LONDON, December 22 (IFR) - The global green bond market is forecast to grow by €300m in 2021, supported by the publication of the final version of the EU’s green bond standards and bond issuance from the EU itself, as well as other sovereigns, says Dutch asset manager NN Investment Partners.

The global supply this year, and in 2019, was around €200m and the new €300m expected by NN IP next year will push the total green bond market volume to €1trn.

A major catalyst for the significant annual increase will be the finalisation of the EU Taxonomy and EU Green Bond Standard. According to NN IP this will not only further standardise and professionalise the green bond market, but also increase the understanding of whether economic activities are environmentally friendly and how they can transition to becoming more sustainable.

In addition, investors will have a clearer picture of what exactly they are investing in while borrowers will have greater guidance on how to identify green assets or activities.

Activities may be labelled green or sustainable providing they contribute to one or more of six environmental objectives or enable other activities to make a substantial contribution; do no significant harm to other environmental objectives; and comply with social and governance safeguards, according to the taxonomy.

Meanwhile, the standard requires that bonds labelled green comply with the taxonomy.

Inaugural issuers will also play a key role in the expansion of green supply in 2021. Green bond issuance from the EU will begin. Some €100m is expected next year and €225m is due to be issued in total.

First time issues are also expected from Italy, Spain, the UK, Denmark, Ukraine and Slovenia, according to NN IP. Previous issuers such as the Netherlands, France and Germany are also likely to return.

(Reporting by Edward Clark; Editing by Robert Hogg)

((e.clark@refinitiv.com; +44 (0)792 053 1666))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More