ESG | Corporate Interest Sprouts In Booming Green Bond Market

Issuance of green bonds, which raise funds to support environmentally beneficial activities, more than tripled last year, to $36 billion, according to the World Bank.

So far, the biggest issuers have been supranational agencies, but corporations are beginning to enter the market to raise funds earmarked for clean energy and water projects. These early issues have been heavily oversubscribed.

“We would like to see more asset-backed or corporate green bonds, since issuance has been limited, and we are interested buyers,” says Delmar King, fund manager at Praxis, the investment arm of Everence Financial of Indiana.

Everence was a purchaser in last year’s $1.75 billion asset-backed green bond offering by Toyota Financial Services. Last May, French utility GDF Suez issued the largest green bond to date, a $3.4 billion bond for renewable energy projects. German government-owned development bank KfW sold $1.5 billion of green bonds in the US last year.