skip to log on skip to main content
VoiceOver users please use the tab key when navigating expanded menus
Article related to:


Sustainable debt down but not out in Q2

ANZ Insights

2022-07-28 00:00

Global sustainable debt issuance fell in the June quarter on the back of investor caution, rising interest rates and the crisis in Europe. Total issuance for the calendar year is now expected to remain largely in line with 2021.

Bloomberg data show issuance in the three months to June fell to $USD370 billion, down 21 per cent on a record performance in the previous corresponding period.

Despite the decline, the total global sustainability debt market now exceeds $USD4.9 trillion, and the period represents the second-highest June-quarter issuance seen to date.

Global issuance is expected to remain flat in the remainder of 2022. While issuance of bonds in the sustainable finance format currently sits at $USD511 billion so far this year, Moody’s expects total issuance to end up at around $USD1 trillion for 2022. 

Increased regulation and taxonomy development is expected to be a continued focus area across the rest of the year. This is expected to boost demand for sustainable finance transactions as issuers seek to highlight their ESG credentials and underlying sustainability strategies.

Further regulatory developments are expected as regional standards become better aligned. The standardisation of reporting will be fundamental for both mandatory and voluntary disclosures. 

Looking beyond 2022, Moody’s believes long-term growth potential remains strong as Europe increasingly focuses on renewables for energy security, and the publication of two new IPCC reports provides impetus for greater financing of climate mitigation and adaptation.

Green growth

Bond transactions continue to dominate sustainable finance, with green bonds remaining the most popular format of issuance. Despite bond markets slowing in the first half of 2022, green bond issuance has increased year on year.

Green bonds represented 44 per cent of all issuances in the second quarter, making up an average 40 per cent of all issuance over the past four quarters.

Sustainability-linked loans (SLLs) remain the second-largest format by issuance volume. SLLs continued to demonstrate their value during the quarter, posting a 23 per cent increase. The number of SLLs is expected to continue growing as more companies set public net-zero targets and look to link their cost of capital to their sustainability strategy.

Notable transactions across the quarter included Monash University’s $AUD105 million sustainability-linked loan. ANZ acted as sole sustainability coordinator and joint lender.

Targets for the facility include a reduction in scope one and two emissions of 72 per cent during the term of the loan.

Across the Tasman, ANZ and Silver Fern Farms partnered to establish one of New Zealand’s largest syndicated sustainability-linked capital working facilities. The $NZD320 million facility is linked to Silver Fern Farms’ sustainability performance targets.

It was the first syndicated sustainability-linked funding transaction for a meat processing company in New Zealand. 

In Asia, Singapore telecommunications firm Singtel issued a five-year, $USD100 million tokenised sustainability-linked bond on the ADDX digital securities exchange. 

You can read more insights into the sustainable finance market in the latest ANZ Sustainable Insights Newsletter.

Sustainable debt down but not out in Q2
Staff Writer
ANZ Insights


Sign up
Icon of ANZ logo coming out of an envelope

Receive insights direct to your inbox


Related articles

This publication is published by Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (“ANZBGL”) in Australia. This publication is intended as thought-leadership material. It is not published with the intention of providing any direct or indirect recommendations relating to any financial product, asset class or trading strategy. The information in this publication is not intended to influence any person to make a decision in relation to a financial product or class of financial products. It is general in nature and does not take account of the circumstances of any individual or class of individuals. Nothing in this publication constitutes a recommendation, solicitation or offer by ANZBGL or its branches or subsidiaries (collectively “ANZ”) to you to acquire a product or service, or an offer by ANZ to provide you with other products or services. All information contained in this publication is based on information available at the time of publication. While this publication has been prepared in good faith, no representation, warranty, assurance or undertaking is or will be made, and no responsibility or liability is or will be accepted by ANZ in relation to the accuracy or completeness of this publication or the use of information contained in this publication. ANZ does not provide any financial, investment, legal or taxation advice in connection with this publication.