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Green bond market predicted to grow to $100bn in 2015



The green bond market continued to see strong growth in the third quarter of 2014 and will reach $100 billion (£62bn) next year, according to the Climate Bonds Initiative.

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Green bonds work in the same way as traditional bonds, with regular interest payments paid over a defined period of time. The green bond market encompasses many different areas from renewable energy to solutions to environmental degradation.

According to the Climate Bonds Initiative’s Green Bonds Underwriters League Table, some $9.2 billion (£5.7bn) of green bonds were issued during the third quarter of 2014. The latest figures take the total green climate bonds issued during 2014 to $32 billon (£19.9), the biggest year yet.

Climate Bonds Initiative CEO Sean Kidney said, “The league table shows that Crédit Agricole, BAML, and SEB were the main drivers of the growth of the ‘labelled’ markets in the last quarter that saw 28 green bonds issued. We predict $100 billion of issuance in 2015 and green bonds to go mainstream in 2016.”

A separate report published earlier this year found that the investment vehicle is entering the mainstream and becoming an increasingly popular choice with the market, now standing at an estimated $502.6 billion (£314bn).

Recently, investors managing assets over $2 trillion (£1.25tn) pledged their support to such climate change solutions, which could deliver the sector a sizeable boost.

At the top of the Green Bonds Underwriter League Table is Crédit Agricole, narrowly beating the Bank of America Marrill Lynch (BAML), with both banks involved in over $140 million (£87m) of deals during the third quarter.

Photo: Krappweis via Freeimages

Further reading:

Investors commit to expanding the climate bond market

Report: climate bonds enter mainstream, reaching $502bn

Green bond investment forecasted to double in 2014

US firm launches $100m green bonds for low-carbon investment

SolarCity offers $200m green bonds to retail investors


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