Global ESG bond issuance triples under decarbonization drive

TOKYO — Global corporate issuance of bonds specializing in environment, social and governance issues has reached $256.8 billion this year, increasing 3.4-fold from the January-June period in 2020, as companies rush to invest in projects and research for decarbonization.

As of Friday, ESG-themed bonds with the highest growth were green bonds, according to data by Refinitiv. Issuance increased by 2.9 times to $162.8 billion, accounting for 63% of the total.

Global investment and loans required for decarbonization will reach between $100 trillion and $150 trillion in the 30 years through 2050, according to the Boston Consulting Group. As public offering may lead to weaker earnings per share, companies are opting to issue bonds while interest rates are low.

ESG bonds are an attractive way to raise much needed funds because of high demands from investors.

Europe topped the volume of ESG corporate bond issuance with $121.4 billion, increasing by 3.2 times and accounting for 47% of the global total. Japan’s issuance increased by 4.7 times to $10.1 billion, while the U.S. increased by 2.5-fold to $29.1 billion. Asia excluding Japan increased by 3.5 times to $76.6.

In March, Toyota Motor issued ESG bonds for the development of technologies related to safety and electric vehicles, worth 130 billion yen in yen-denominated bonds and $2.7 billion in dollar-denominated bonds. French electric utility EDF raised 1.25 billion euros with an ESG bond issue in May

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