Asian Sustainable Bond Market Report
The International Capital Market Association (ICMA) releases the Asian sustainable bond market report, which aims to analyze the development of green bonds, social bonds, sustainable bonds and sustainability-linked bonds in Asia.
ICMA has established voluntary best market practices for sustainable bond products that apply globally and has issued a number of sustainable bond frameworks. These frameworks have been used as benchmarks for more than 97% of sustainable bonds worldwide.
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Asian Sustainable Bond Market Data
After growing from $234 billion in 2019 to $780 billion in 2021, global sustainable bond issuance gradually decline to $620 billion in 2022 and 2023. The trend of sustainable bond issuance in Asia is similar, with sustainable bond issuance in Asia approaching US$100 billion in 2021, before falling back to US$80 billion in 2022-2023. Among Asian jurisdictions, China has the largest sustainable bond issuance scale, reaching US$21 billion, accounting for 26% of the total issuance in Asia. Hong Kong’s issuance volume doubles in 2023 to reach US$16 billion, occupying the second place.
By jurisdiction, Hong Kong has the highest proportion of sustainable development bond issuance in Asia, with the number of sustainable development bonds accounting for 54% of the total bond issuance. When issuing sustainable bonds, the most important factors that issuers consider are financing costs, currency of issue and sustainable profile-building.
Asian G3 Sustainable Bond Market Data
ICMA analyzes relevant data on Asian G3 sustainable bond market. G3 bonds refer to bonds denominated in USD, EUR or JPY. The issuance period of G3 sustainable bonds in 2023 is concentrated in 3-7 years, accounting for 70% of the total issuance. In terms of issuers, banks (26%), sovereign issuers (21%), and supranational organizations and institutions (13%) account for a relatively high proportion. The types of issuers have gradually diversified, including the materials industry, real estate industry, information technology industry and healthcare industry.
Compared with the overall market, primary issuance can enjpy an additional 3bps of more weighted average IPG tightening compared to that of overall market, but the oversubscription rate of sustainable bonds (4.45) is lower than the market average (4.74 ). For investor types, asset management companies (44%) and banks (32%) account for the highest proportions. Investors mainly come from Asia (62%), Europe (25%) and the Americas (13%). In terms of issuance location, one-third of sustainable bonds are issued in Hong Kong every year.
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