Bron
Amundi
Amundi, the largest European asset manager and IFC, a member of the World Bank Group, have unveiled their Emerging Market Green Bonds annual report. Green, social, sustainability, and sustainability-linked bonds (GSSS) are a relatively young asset class, established with the first green bond transactions just over a decade ago. This analysis shows that global GSSS bond issuance hit an all-time high of over $1 trillion in 2024 on a gross basis, up 3% from a year earlier. However, the asset class’s share of total fixed income issuance declined to 2.2% in 2024 from 2.5% the previous year. This remains well above the levels of 0.6% seen in 2018.
Within emerging markets, GSSS bond sales fell 14% year-on-year. Much of this decline can be attributed to lower issuance in China as local borrowers shifted to conventional bonds in the onshore market. Another factor behind the market retreat was a 23% contraction in overall fixed income issuance in emerging markets outside China amid weaker economic growth in Asia and Europe. Despite this, GSSS bond penetration amounted to more than 5% in emerging markets outside China, a new record and ahead of the rates seen in China and in developed markets.
In terms of pricing, the so-called green premium or “greenium” (a yield discount for issuers of GSSS bonds) more than halved to an estimated 1.2 basis points in 2024 from 2.5 bp in 2023, according to Amundi calculations. For emerging markets, meanwhile, the greenium effectively disappeared in 2024 as supply caught up with demand for this type of asset.
Yerlan Syzdykov, Global Head of Emerging Markets at Amundi, adds: “The GSSS bond market is experiencing significant diversification. Although green bonds have long dominated GSSS emerging market bond issuance, there is a growing shift toward sustainability bonds. This trend is pronounced among multilateral institutions and, more generally, among issuers outside China that are seeking the flexibility of sustainability bonds to finance both environmental and social projects.”
