The global sustainable finance market is changing for the better, according to Dutch bank ING, with a “decent” level of issuance still possible and investors increasingly attentive to the credibility of the commitments and plans behind deals.

Global sustainable finance issuance volumes declined in 2022 and 2023 from a peak in 2021, but in the first half of 2024 sustainable debt sales reached $800bn (€718bn), almost the same level as that in the first half of 2023, researchers at the bank said.

An increase in the annual volume is now probable this year, wrote Coco Zhang, ESG research and Padhraic Garvey, regional head of research, Americas, in an update.

They said a “decent issuance level” could be on the cards this year as companies needed to demonstrate on-schedule progress towards sustainability targets as well as an increase in green capital expenditure, “and sustainable finance remains a key tool to help achieve that”.

“Meanwhile, the emergence of innovative products can help to keep the sustainable finance market attractive,” they added.

Although sustainability-linked bonds (SLBs) and sustainability-linked loans (SLLs) had lost some popularity and the public sector continued to be the driver of issuance growth, new detailed guidance for the market could support companies across a wider array of sectors to engage in sustainable finance issuance, according to Zhang and Garvey.

They also said that issuance volume was no longer the only metric investors looked at, and that there had been substantial progress in the quality of offerings over the past decade. For example, they said that between 2013 and 2014, the percentage of issuance volumes that are under impact reporting schemes increased from less than 10% to 70%, while the percentage with third-party assurance grew to 65%.

“Investors and other stakeholders will increasingly search for issuance where material impact can be demonstrated every step of the way,” wrote Zhang and Garvey.

“To showcase credibility, issuers are better off adhering to sustainable finance principles not only at a high level but also in detailed operation and reporting. Standard-setting bodies would also benefit from setting more specific guidance on existing or new types of products.”

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Susanna is deputy news editor at IPE. At IPE she covers responsible investment and EU regulation, but also enjoys reporting on developments in and around the UK pensions industry. Having been a financial journalist since 2008, Susanna started her career as a corporate governance/corporate social responsibility analyst at proxy advisory firm PIRC.View full Profile

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