Global climate bonds trade surges to $694B in 2016: new report
In the UK, The Climate Bonds Initiative has published its 5th annual report ‘Bonds and Climate Change: the State of the Market in 2016’, finding that climate-aligned bonds market now stands at $694bn – A jump of $96bn (16%) from the 2015 figure. This total is comprised of unlabelled climate-aligned bonds at $576bn and labelled green bonds at $118bn.
Unlabelled issuance is dominated by China Railway Corporation (largest issuer with $194bn). Burlington North Santa Fe is the largest issuer from within the USA, making up 17% of USA issuance alone.
The universe is made up of over 3,590 bonds (issued from Jan 2005 to May 2016) from 780 individual issuers across transport, energy, buildings and industry, water, waste and pollution and agriculture and forestry.
In the climate-aligned bond universe, the Chinese RMB is the dominant currency (with 35% of the total amount outstanding), followed by the US dollar (24%) and the Euro (16%). 78% of the universe is investment grade; the majority of bonds have tenors of 10 years or more; the majority are also government-backed.
The $96bn increase on 2015 includes $94bn in new bonds from existing issuers, plus $85bn from new issuers minus $83bn of matured bonds and issuers that no longer meet our climate-aligned criteria. Low carbon transport was the largest single sector, accounting for $464bn (67%) of the total climate aligned universe, followed by clean energy at $130bn (19%).
The remaining $97bn (14%) is drawn from Building and Industry, Agriculture and Forestry, Waste and Pollution, Water or Multi-Sector bonds; a small but welcome pointer towards more diversity in issuance.
Category: Fuels
