(Finance) – The ESG-linked bond issues they represented almost 30% of all bond issues of European non-financial corporations during the first half of 2022, compared to only 19% in the same period last year. However, on a quarterly basis, following rapid growth in the third quarter of 2021, the share of ESG-indexed bonds has stabilized over the past four quarters, while ESG bond issues in the first half of 2022 in North America and Asia recorded a moderate decline. This is highlighted in a new report by Scope Ratings on the subject.
“To be sure, this stability is in stark contrast to the strong overall increase in volumes of corporate bonds linked to ESG criteria in 2021,” commented Eugenio Piliego, director in corporate ratings at Scope. “However, the healthy appetite for issuing ESG-linked bonds coincides with the slowdown in overall corporate bond issuance due to market growth and macroeconomic uncertainty in the past two quarters, exacerbated by Russia’s escalation of the war in Ukraine in February, “he added.
ESG-linked issues in Europe in the first half of the year were driven by the capital-intensive sectors typically associated with active finance on the capital markets, namely utilities, real estate and telecommunications. Utilities were particularly active. THE major European broadcasters of ESG bonds in the first half of the year were the Italian utility Is in the (€ 7 billion), the Dutch water utility TenneT Holding (€ 3.9 billion), the German real estate company Vonovia (2.6 million euros), the French water company Suez (2.6 billion euros) and the German utility E.ON (€ 2.3 billion).
“In Europe, we expect the share of the overall market comprised of ESG-linked bonds will continue to remain stable for the rest of the year around 29%with emissions in North America that will be around 5-6%, with a similar figure for Asia, which represents a slight decline “, explained Piliego.
The utilities, real estate and telecommunications sectors increased their combined share of the ESG-linked market to 69% from 56% in the same period last year, with the activity of other issuers, such as capital goods and consumer goods, stabilizing or down. The issuance of ESG-linked bonds during the first half of 2022 was led by issuers from Italy, France and Denmark. The Italian companies once again issued the highest relative amount of ESG bonds, over 80%, with Enel making the largest contribution.