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Deciphering different instruments in the sustainable bond market

Ezien Hoo, Andrew Wong, and Wong Hong Wei
Ezien Hoo, Andrew Wong, and Wong Hong Wei 7/29/2021 02:52 PM GMT+08  • 8 min read
Deciphering different instruments in the sustainable bond market
Here's a look at what has happened in the market so far and the different types of instruments in the market.
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After decades of activists warning of the risks of climate change, taking action to build climate resilience is finally becoming mainstream and with that, the sustainable bond market. According to data from Bloomberg, from the beginning of the year until July 28, global issuance volume (corporate as well as government sustainable bonds) totalled US$512.3 billion ($696 billion) and looks set to outstrip the US$698.9 billion issued in 2020 and 2019 in aggregate. Half of the issuance volume issued year to date consists of green instruments. In tandem with this trend, the SGD sustainable bond market is expected to grow, albeit from a low base. We take stock of what has happened in the market so far and the different types of instruments in the market.

The many instruments within the sustainable bond market

What makes up a market is not cast in stone but rather what the participant in a market collectively reaches a consensus on. New instruments, terminologies and standards may still emerge for sustainability-related bonds.

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