how 2023 went and expectations for 2024

2023 was a big year for i GSS (Green, Social, Sustainability and Sustainability-Linked) Bondwhich represented, on average, the 20% of the debt issued in Europe, exceeding the threshold of 4 trillion total dollars issued. This is what emerged from the latest edition of the quarterly report MainStreet Partners on the sector. Last year marked a slight decline in the total amount issued compared to the previous year (-9%) and in the number of new issuers. However, it is interesting to note that during 2023 they debuted, 517 “new issuers”, down from the 594 in 2022 and the 927 in 2021 – a figure that highlights the strong interest in creating real “GSS” emission programs by issuers who have approached this market for the first time. D

where multiple GSS Bonds were issued

The data available on GSS Bonds allow a comparison between the country of an issuer's registered office and the countries where the projects financed by the bond are located: the United States turn out to be the State with the larger number of “green” projects, while the France it is the nation with the most projects in the social sphere.

European taxonology and benefits

In-depth analyzes at the individual project level have highlighted i advantages of investing in Green Bonds: these have in fact, on average, an alignment with European Taxonomy (about 60%) significantly higher than corporate revenues or capital expenditures (on average less than 10%). Between 2022 and the end of 2023 the alignment to the European Taxonomy of a sample of Green Bond funds increased from approximately 30% to well over 40%. At the same time the “CO2 saved” from the same funds (compared to 1 million euros invested) is decreased from around 600 tonnes to just under 500. The drop in the average “CO2 saved” is partly due to the increased cost of the projects (e.g. impact of inflation), but also to a greater share invested in sovereign bonds, which they notoriously report lower impact results than corporate bonds.

Outlook for 2024

Despite global macroeconomic uncertainty in some key areas, S&P predicted than sustainable bond issues will increase modestly between 950 billion dollars and 1.05 trillion dollars in 2024from 980 billion dollars in 2023. According to estimates by the rating agency i green bonds will continue to dominate the market of GSS, supported by the increase in demand for environmental projects in all geographical areas. Transition bonds and blue bonds could also gain ground in the GSS market in 2024. Finally, according to S&P, issuers from middle- and low-income countries will seek to increase their share of GSSSB issuance in 2024, given the high funding needs not satisfied.