Real estate contributes to stagnant green bond market
ESG bond issuance has plateaued in recent years, with real estate market troubles one of the factors, says ING.
The Dutch bank expects €820 billion ($890 billion) of ESG bonds to be issued in 2024, marginally ahead of this year’s estimated €815 billion and the €800 billion seen in 2022. This follows rapid growth to a peak of €1,005 billion of issuance in 2021.
ING blames the lack of growth on a slower lending growth and a slower green projects pipeline in a higher interest rate environment as well as lower capital expenditure, especially in real estate “which has concentrated its efforts on balance sheet management in an environment where asset valuations were negatively impacted”.