Green and other ESG-related bonds crossed a $4 trillion threshold in the first half of 2023, despite a sharp drop in ones from the United States, Climate Bonds Initiative reported Monday.
The London-based global non-profit, which mobilizes capital for climate-action measured bonds for green, social, sustainability or transition alignment, found that those aligned with its methodology reached a combined $4.2 trillion by the end of June.
Green bonds had the biggest share at 62%, followed by social and sustainability debt that made up 15% and 14%, respectively. The euro continued a six-year streak as the dominant currency, with 47% of volume.
Financial corporate debt had the largest share, with 29% of volume, followed by non-financial corporates at 25% and sovereigns at 19%, representing nine countries.
The $448 billion in ESG bonds captured in the first half of the year was down 15% from the same period in 2022.
The drop was even more dramatic for those originating in the U.S., which fell 39% to $39.8 billion from $65 billion in the first half of 2022. "The anti-ESG political rhetoric in the United States may have been a contributing factor," Climate Bonds Initiative said in a release on the market update.
CEO Sean Kidney said in the release that $5 trillion of sustainable finance needs to be raised annually for the rest of the decade "to prevent future climate collapse."
According to the market update, another $86.9 billion in ESG-related bonds are pending analysis, while bonds not meeting the criteria represented $571.2 billion by midyear.
