Sustainable Debt Global State of the Market 2022

1. Introduction

About this report

This is the 12th iteration of Climate Bonds Initiative’s (Climate Bonds) Global State of the Market Report. The scope of this report includes analysis of the green, social and sustainability (GSS) markets, plus sustainability-linked bonds (SLBs), and transition bonds. This report describes the shape and size of the GSS, SLB, and transition (collectively GSS+) debt market as of 31 December 2022.

About the Climate Bonds Initiative

Climate Bonds is an international organisation working to mobilise global capital for climate action. It promotes investment in projects and assets needed for a rapid transition to a low- carbon, climate-resilient, and fair economy. The mission focus is to help drive down the cost of capital for large-scale climate and infrastructure projects and to support governments seeking increased capital markets investment to meet climate and greenhouse gas (GHG) emission reduction goals. Climate Bonds conducts market analysis and policy research; undertakes market development activities; advises governments and regulators; and administers a global green bond Standard and Certification scheme. Climate Bonds screens green finance instruments against its global Taxonomy to determine alignment, and shares information about the composition of this market with partners. The Climate Bonds team has also expanded its analysis to other thematic areas, such as social and sustainability bonds via the development of screening methodologies for investments that give rise to positive social impacts and added resilience. Certification against the Climate Bonds Standard (CBS) represents about 20% of global green bond market volumes. This scheme is underpinned by rigorous scientific Criteria to ensure that Certified bonds and issuers are consistent with the well-below 2 ̊C target of the Paris Agreement. Obtaining and maintaining Certification requires initial and ongoing third- party verification to ensure the assets meet the metrics of sector Criteria.

Climate Bonds expands its Certification scheme to include corporate entities and SLBs

Certification under the Climate Bonds Standard v4 (CBS v4) is expanding beyond Use-of-Proceeds (UoP) instruments to include non-financial corporate entities and their SLBs. Launched in April 2023, the CBS v4 is a major new development for Climate Bonds, which has driven credible climate financing for over a decade. Drawing from its experience in developing detailed sector Criteria for assets, activities and investments, Climate Bonds will provide transparent science-based Criteria for non-financial corporate entities, credible SLBs and similar instruments, and assurance for investors that sustainability requirements have been met in respect of any Certified issuance.

This work goes beyond sectoral transition pathways and includes key governance elements that indicate a company’s preparedness to transition to net zero. Certification will be available for corporates with emissions already near zero as well as those with activities in high-emitting sectors, providing the corporate has suitably ambitious performance targets and credible transition plans. CBS v4 enables corporates aligned with 1.5-degree pathways, or those that will be aligned by 2030, to obtain Certification. SLBs issued by and in respect of the activities of qualifying non-financial corporates can also be Certified under the CBS v4.

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