Tracking sustainability-linked loans, margin ratchets etc. – how is the market converging on what is the baseline? All
In Q1’23, European ESG bond and loan issuance accumulated a total of €156bn in proceeds, declining 4.3% year-on-year (YoY) but increasing 10.7% quarter-on-quarter (QoQ).
ESG bonds and loans include ESG-labelled bonds (proceeds-based), sustainable-linked bonds, transition bonds, green-linked loans and sustainable-linked loans. The quarterly increase was driven by ESG- labelled bonds, which accumulated €116bn in proceeds, the second-largest quarterly issued amount on records. French issuers continued to lead in total ESG bond and loan issuance, followed by German issuers.
In Q1 2023, ESG Securitisation issuance accumulated €1.1bn in proceeds, an increase of 103.3% compared to the first quarter of 2022, on two green RMBS and one social ABS.
All ESG-labelled market segments exhibited an annual expansion in Q1 2023:
• Green bond issuance stands out as the ESG sub asset class that has grown the most on an annual basis by 69.6% YoY (63.9% QoQ). The increase was driven by the corporate and supranational sectors, with Germany leading as the top nationality of issuers.
• Social bond issuance increased 8.2% YoY and 23.5% QoQ. We continue to see a strong participation of the French agency CADES as it consolidates as a market leader for social bonds.
• Sustainable bond issuance increased 47.6% YoY and 97.4% QoQ, which shows the largest expansion on a quarterly basis. France and Spain were the top issuers of sustainable bonds in the Europe in Q12023. The sustainable-linked bond