China Leads Way on Green Bond Issuance

Onshore and offshore green bonds originating from Chinese issuers in 2023 amounted to $131bn, according to Climate Bonds Initiative.

China remains the biggest green bond market for the second consecutive year, according to the Climate Bonds Initiative (CBI).

Green bonds for both onshore and offshore deals amounting to USD 131 billion originated from Chinese issuers in 2023.

Although this represented a 3.5% decrease in volume compared to 2022, the CBI noted that both the quality and credibility of green bonds increased, with 63.6% of these deals included in the Green Bond Database (GBDB) – an increase from 57.3% the previous year.

“We expect debt instruments to play a more prominent role in China’s green transition and expect a credible transition finance market to provide additional funding for the decarbonisation of high carbon-emitting sectors, such as power, steel, chemicals and agriculture,” said Sean Kidney, CBI’s CEO.

“Financing climate resilience will become the top priority on the agenda.”

Germany came second in the ranking, having issued USD 67.5 billion in green bonds, while the UK moved up from seventh to fourth with USD 32.6 billion.

Hong Kong logged the single largest increase, having grown by 173.3% year-on-year.

For hard-to-abate sectors, China also maintained its status as the most frequent sustainability-linked bond (SLB) issuer, issuing 53 last year worth a total of USD 5.7 billion of debt.

“There is still a lot of demand and investment opportunities for climate finance, and we look forward to seeing China continue to maintain its world leadership in sustainable finance in terms of policies, standards, product innovation, and capacity building,” said Kidney.

“This will not only help [the country] achieve its dual carbon goals, but also contribute to the global response to climate change and the goals of the Paris Agreement.”

Read more articles like this on Regulation Asia’s sister publication, ESG Investor.

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