S&P Global Ratings has provided its outlook for the green, social, sustainability, and sustainability-linked bond (GSSSB) market for 2024.
Its report forecasts that sustainable bond issuance will likely reach US$1 trillion this year.
Further, it notes that green bonds will continue their dominance in GSSSB markets, buoyed by increased demand for environmental projects across all geographies.
Transition and blue bonds may also gain traction in the GSSSB market in 2024, it shared.
The report anticipates that GSSSB issuance will increase modestly to $0.95 trillion-$1.05 trillion in 2024, from $0.98 trillion in 2023.
“GSSSB issuance could represent 14% of total bond issuance in 2024. In our opinion, GSSSB issuance will rise at nearly the same pace as conventional bond issuance for the second consecutive year,” the report said.
The factors underpinning growth here include:
- Increased adoption of sustainable taxonomies and transparency initiatives,
- Growth in issuance from emerging markets, and
- Efforts to accelerate the energy transition.
However, the report notes that certain macroeconomic factors could restrict issuance, including uncertainty associated with high interest rates and the possibility of wider economic slowdown in key regions such as Europe and Asia-Pacific.
Read the full report here.