Recovery in ESG bond issuance seen in 2023 as rates stabilise, inflation subsides

ISSUANCE volumes of environmental, social and governance (ESG) bonds are set to recover in 2023 as interest rates stabilise and inflation subsides, market analysts told The Business Times.

This would be a welcome change for the sustainable finance industry. Global ESG bond proceeds declined 26.4 per cent year on year (yoy) to US$699.1 billion in the Jan 1 to Dec 9, 2022 period, according to Refinitiv data. The number of ESG bonds in that period fell to 1,549 from 1,764. For the whole of 2021, global ESG bonds raised US$953.2 billion.

The amount raised from ESG bonds in South-east Asia bucked the global trend, growing by 36.9 per cent yoy to US$21.6 billion in the Jan 1 to Dec 9, 2022 period – above the 2021 total of US$15.7 billion.