CA sees ESG bonds reach EUR600bn in 2021

Crédit Agricole CIB says it expects green, social and sustainability bond supply to reach EUR600bn in 2021, an increase of 55% on 2020.

Damien de Saint Germain, Head of Credit Research & Strategy at the bank, says issuance continued to grow in 2020 due to the Covid-19 crisis and increasing concern about climate change.  In 2021, the bank sees green bonds dominating the ESG fixed income market with 48% of issuance followed by social bonds (31%) and sustainability bonds (13%). The biggest increase in issuance is expected to come from sovereigns and non-financial corporates.

This growth should be helped by both individual European countries and the EU which could issue EUR140bn in sustainable supply though green and social bonds. Issuances in EUR are expected to account for 60% of the coming supply, the bank added.

According to Tanguy Claquin, Global Head of Sustainable Banking: “The development of sustainability-linked instruments, the emergence of social bonds alongside green bonds and the upcoming EU Taxonomy regulation are strong trends and excellent news in sustainable financial markets. Issuers now have in hand a range of instruments responding to different responsible investment strategies and we will continue to advise them in their Sustainable journey.”