Fuelled by the Covid-19 recovery, sustainable bond issuance has already outperformed last year’s record levels and shows no signs of slowing down.

Global supply: Sustainability-linked bonds in the fast lane

Green bonds still hold the upper hand on the number of total issuances. However, when it comes to growth, the newcomer category, sustainability-linked bonds, has shown increased momentum since the release of the Sustainability-Linked Bond Principles in mid-2020. Social bond issuance seems to have slowed down compared to last year, potentially due to a lower share of sovereign, supranational and agency (SSA) issuances to date. Across the four issue categories, issuance in the first half of 2021 was already 15% higher than all of last year combined.

In terms of geographies, Europe is still a clear market leader. However, Asia Pacific is gathering pace again after a slight slump in 2020. Issuances globally are expected to pick up ahead of, and following, the COP26 conference in November and with policy developments, such as extensions of the EU Taxonomy and the Fit for 55 package.

Market Update chart showing supply by bond type
Market Update Chart showing sustainable debt supply by geographic region

Nordic supply: Sweden still in the lead while Finland gathers pace

On the Nordic level, sustainable bond issuance is already 12% above total 2020 issuance, and green bonds already make up nearly 30% of total corporate bond issuances in both number and volume. From a Swedish perspective, the real estate sector seems to have recovered from a pandemic dip, while SSA issuances have decreased from 36% to 15%, a third of last year’s share of issuances.

Market Update chart showing Nordic corporate share of sustainable bond issuance
Market Update chart showing Nordic supply by sector

Sustainability-linked bonds and loans: Opening a range of opportunities for new issuers

Sustainability-linked products have proven popular among issuers not (yet) able to gain access to funding under a green bond label. As such, more than 40% of issuances came from the utility and materials sectors. On the other hand, for sustainable loans, issuers show a higher fragmentation across sectors. Increasingly, companies such as BeWi and Verbund have even issued combined products, aligning to both sustainability-linked bonds and sustainable bonds, signalling strong accountability to investors about both the use of proceeds and the impact generated.

Sustainability-linked issuance by sector

Across regions and instruments, Nordea expects the strong growth trajectory to continue in the coming months, with cumulative issuances estimated to hit the 2 trillion mark before the new year.


Ebba Ramel, Sustainable Finance Advisory, Nordea.

Lea Gamsjäger, Sustainable Finance Advisory, Nordea

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