Moody’s Investors Service recently released a report indicating a robust rebound in issuance volumes of green, social, sustainability, and sustainability-linked (GSSS) bonds in Q1 2024. Compared to the prior quarter, these bond volumes surged by 36%, reaching $281 billion from $207 billion in Q4 2023.
While sustainable bond issuance showed a slight year-over-year increase to $279 billion in Q1 2024, accounting for 12% of total global bond issuance, down from 14% in 2023, Moody’s maintains its full-year forecast for GSSS bond issuance at $950 billion for 2024, slightly higher than 2023.
Green bonds continued to dominate the market, representing 60% of total volumes, with issuance hitting $169 billion in Q1 2024, mainly driven by nonfinancial corporate and sovereign issuers. Moody’s projects green bond issuance to reach $580 billion for the full year.
Social bond issuance rebounded to $48 billion in Q1 2024, with a notable $13 billion issuance from the French public finance agency CADES. The full-year forecast for social bond issuance remains at $150 billion.
Sustainability bond issuance nearly doubled compared to the previous quarter, reaching $55 billion, with Moody’s projecting full-year volumes to reach $160 billion.
Despite the strength of first-quarter sustainable bond volumes, we are maintaining our full-year 2024 sustainable bond issuance forecast of $950 billion as global macroeconomic conditions remain relatively soft.
Matthew Kuchtyak, VP-Sustainable Finance at Moody’s Ratings
However, sustainability-linked bond (SLB) issuance declined sharply to $10 billion, reflecting investor scrutiny over credibility issues. Moody’s maintains its full-year forecast for SLB issuance at $60 billion.
The report also highlights key trends, including the growth of green industrial policies and regulatory pressure on companies to decarbonize, driving increased green investments and sustainable bond issuance. Sovereign issuers also saw significant growth, reaching $59 billion in Q1 2024, with further growth expected as countries use labeled bonds to finance climate and sustainability goals.
Although sustainable bond issuance accounted for the lowest quarterly share of global bond issuance since the beginning of 2022, we expect sustainable bonds to remain top of mind for issuers in many markets as climate finance needs, investment in emerging green technologies and market innovation support volumes this year.
Matthew Kuchtyak, VP-Sustainable Finance at Moody’s Ratings
