Growth in Social- and sustainability-linked issuance outpaced the growth in green bond issuance, with combined volume more than doubling last year compared with 2020. As a proportion of corporate bonds brough to market, ESG-linked issuance stood at 29% in Q4, up a little from 28% in Q3 2021, bringing the segment’s share to 24% for the entire year.

“ESG-linked bond issuance has surged globally, especially in Europe and Asia, with the latter likely to surpass Europe in absolute volume in 2022,” says Eugenio Piliego, analyst at Scope Ratings. In Europe, growth of ESG-linked bonds share should slow in coming quarters.

“The momentum building in ESG-linked issuance was visible in the quarter-on-quarter growth in the first nine months of the year, levelling out in Q4, a trend, which suggests ESG-linked bonds might plateau at around a third of total issuance this year,” says Piliego.

Amid the steep overall increase in ESG-linked corporate bond volumes in 2021, issuers have emerged in more sectors beyond utilities and real estate - where ESG-linked bonds have become the norm - accounting here generally for 15-20% of new issues. Italian and British issuers have caught up with those based in other European countries, though France-based companies still dominate in terms of volumes.

Italian utility Enel SpA (EUR 10.1bn), Teva Pharmaceuticals (EUR 4.3bn), Electricité de France SA (EUR 3.1m), ASTM Spa (EUR 3.0bn) were last year’s leading issuers.

“Companies in the utilities and real estate continued to be the most active issuers of ESG-linked bonds in 2021 by volume at 56% of total, broadly in line with last year, but markedly below pre-2019 levels as other companies have tapped the market,” says Klaus Kobold, analyst at Scope. Utilities have dominated ESG issuance in Europe, but real estate companies are catching up.

Download the report

Access all Scope rating & research reports on ScopeOne, Scope’s digital marketplace, which includes API solutions such as for Credit Sphere.