FROM the end of 2020, through all of 2021 and then the first half of 2022, sustainability-linked bonds (SLBs) were all the rage. In the fourth quarter of 2021, SLBs made up more than half of new ESG bond issuance in South-east Asia, according to Refinitiv data.

But just like that, SLB volumes have dried up. There were no new SLBs issued in South-east Asia in the first half of 2023. Their share of the ESG bond market in the rest of the world has also declined.

It’s what happens when enough people have played with the shiny new toy and realised that it is not as awesome as it looked in the commercials and in the hands of that kid on the bus. SLBs have become the fidget spinners of ESG bonds.