LONDON, Jan 8 (Reuters) - The volume of sustainable debt issued globally last year reached a record of $465 billion, with green bonds accounting for more than half of that amount, research showed on Wednesday.
Last year, sustainable debt — which includes green bonds and sustainability-linked loans — rose by 78% from $261.4 billion the previous year. Cumulative issuance broke the $1 trillion barrier to reach $1.17 trillion on Dec. 31, research by Bloomberg New Energy Finance (BNEF) showed.
As pressure grows for investors, lenders and companies to use money in ways which do not harm the environment, sustainable finance has increased, integrating environmental, social and governance (ESG) criteria into investment decisions.
Green bonds accounted for more than half of the total sustainable debt market last year with issuance rising to $271 billion from $182 billion in 2018.
Green bonds are a growing category of fixed-income securities that raise capital for projects with environmental benefits.
The volume of sustainability-linked loans, which link a borrower’s performance to ESG criteria, jumped by 168% to $122 billion last year.
“Our data show sustainable finance continuing to power ahead on a global basis,” said Jonas Rooze, lead sustainability analyst at BNEF. “The steep increase is fuelled by end-investors’ concerns about the threat of climate change, and the desire of many big company, bank and government leaders to be seen as behaving responsibly.”
Mortgage financier Fannie Mae was the biggest issuer of global sustainable debt, securitising mortgages totalling $22.8 billion, the report showed.
Reporting by Nina Chestney; Editing by Kirsten Donovan