European ESG bond issues decline in Q1 2022

European ESG bond and loan issuance declined 32.4% in Q1 2022 on the previous year, according to the Association for Financial Markets in Europe.

The AFME has published its latest European ESG Finance quarterly data report for the first quarter of 2022. The report also says that ESG bonds and loans including ESG-labelled bonds, sustainable-linked bonds, transition bonds, green-linked loans and sustainable-linked loans represented 14.1% of total European bond issuance during Q1 2022, down from 19.5% in 2021.

The AFME says that market conditions have been unfavourable for primary issuance with an absence of large ESG deals from the EU Commission and other sovereigns also contributing to the decline. However, the sustainable-linked bond market was the exception with a significant four times increase YoY in issuance.

Global ESG funds totaled $7tn as of Q1 2022, a $0.8tn decrease from $7.8tn in Q4 2021.