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Rising rates drag SE-Asian ESG bond volumes down 36% in Q1 2023, but sustainable loans grow

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Janice Lim

Janice Lim

Published Mon, Apr 17, 2023 · 05:50 AM
    • Bankers told The Business Times that the momentum for sustainable financing in Southeast Asia would bounce back, with support from sovereign issuers. 
    • Bankers told The Business Times that the momentum for sustainable financing in Southeast Asia would bounce back, with support from sovereign issuers.  PHOTO: REUTERS

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    PROCEEDS raised from environmental, social and governance (ESG) bonds in South-east Asia fell 35.7 per cent year-on-year to US$4 billion in the first quarter of 2023 as rising interest rates stirred up market volatility.

    The region lagged the rest of the world, with global issuance growing 4.2 per cent to US$229.9 billion, according to data from financial data provider Refinitiv. In Asia excluding Japan, ESG bond proceeds declined 5.8 per cent to US$42 billion over the same period.

    On a quarter-by-quarter basis, South-east Asian ESG bond proceeds rose 40.3 per cent from the last quarter of 2022 but still trailed the rest of the world. Quarterly growth was 77.1 per cent globally and 46.1 per cent in Asia ex-Japan.

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    sustainable financeESGgreen bondsdebt capital markets

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