As published on funds-europe.com, Wednesday 13 May, 2020.
Green bond issuance in emerging markets saw a sharp increase in 2019, rising to US$52 billion – a 21% increase, according to a joint report published by Amundi and the International Finance Corporation (IFC).
Over the same period, the global green market saw a record $240 billion in issuance. The figure accounts for 3% of total global bonds issued in 2019.
Since 2012, 35 emerging markets have issued green bonds with five making their debut offerings last year, according to the Amundi-IFC Emerging Market Green Bond Report.
Of the emerging markets, China was the largest issuer of green bonds last year with more than $34 billion – something it has done each year since 2016. East Asia and the Pacific account for 81% of total emerging market green bond issuance.
With the coronavirus pandemic affecting every facet of life, Amundi noted that “emerging market economies have far less room for fiscal and monetary manoeuvring, and as shown by early indicators, will be disproportionately hit by the Covid-19 crisis. Today, both green bond issuers and investors face the challenge of overcoming current market turbulence.
“However, responsible investors with long-term allocations to emerging markets can collaborate with issuers through green bonds and ESG funds to unlock long-term capital and help issuers become more resilient.”
Yerlan Syzdykov, global head of emerging markets at Amundi, acknowledged that assessing the long-term consequences of the current public health crisis is challenging and that barriers remain to scaling green bonds.
However, he noted, “momentum is building with more investors seeking to align their investment strategies with environmental considerations. Our research indicates that the green bond phenomenon, especially in emerging markets, shows potential signs of resilience during these unprecedented times.”