Sustainability-linked bonds falter amid credibility concerns

IN AN era of higher scrutiny for sustainable investing products, green bonds are proving to be the tried-and-tested sustainability choice for fixed income investors as more esoteric offerings falter.

Global green bond issuance has remained steady – the total in the first four months of this year was US$232 billion, equal to the issuance in the same period in 2023, according to a report from Morgan Stanley.

However, in the case of sustainability-linked bonds – a newer product that has come under fire from environmentalists – issuance was down 51 per cent in the first four months, compared with 2023, to just US$12.5 billion.