PARIS–(BUSINESS WIRE) – 2020 was another strong year for sustainable finance, mainly supported by the issuance of social bonds and the rise of bonds linked to sustainable development. It was driven by 2 main factors: the Covid-19 crisis, which highlighted the need to develop resilience to risks and shocks, including those related to the climate and the environment, and climate neutrality commitments , which are spreading in several countries, with some already supported by investment plans.
In 2021, Crédit Agricole CIB sees a continuation of this dynamic. According to Damien de Saint Germain, Head of Credit Research & Strategy at Crédit Agricole CIB: “We anticipate an acceleration of the green, social and sustainable offer in 2021. We estimate that it could reach 600 billion euros, an increase corresponding to 55% compared to the amount issued in 2020. ”
Evolution of the issue volume of green, social and sustainable bonds and forecast for 2021: | |||||
| In EUR bn | 2018 | 2019 | 2020 | 2021F | YoY% |
| Business – Non-financial | 30 | 80 | 111 | 180 | 63% |
| Corporate – Finance | 47 | 64 | 60 | 70 | 16% |
| SSA excl. sov | 35 | 69 | 137 | 190 | 38% |
| Sovereign | 15 | 22 | 77 | 159 | 106% |
| Final sum | 127 | 236 | 386 | 599 | 55% |
* Cumulative issues at the end of November 2020 and published in CA CIB ESG 2021 Outlook on December 16e, 2020
Source: Bloomberg, Crédit Agricole CIB
This growth should be largely supported by both European countries and the EU, which could issue 140 billion euros of sustainable supply through green and social bonds according to our estimates. Agencies and supras are expected to remain the largest source of supply, with the big names shifting the majority of their shows to a sustainable format.
On the product side, diversification should continue with bonds linked to sustainable development and sustainable bonds which could represent around 20% of the sustainable supply. Sustainability bonds and bridging bonds can attract new issuers and new industries. And issues in EUR should still represent 60% of the future supply.
According to Tanguy Claquin, Global Head of Sustainable Banking: “The development of instruments linked to sustainable development, the emergence of social bonds alongside green bonds and the future EU taxonomic regulation are strong trends and excellent news in sustainable financial markets. Issuers now have a variety of instruments in hand that respond to different responsible investment strategies and we will continue to advise them in their sustainable approach.
With 6.5% market share at the end of 2020 (Bloomberg), Crédit Agricole CIB is one of the market leaders in green, social and sustainable bonds. In 2020, the bank was bookrunner for more than 100 benchmark transactions, including the first German Green Bund, EDF’s first Green Convertible Bond, the Suzano Inaugural Sustainability-Linked Bond as well as numerous bonds linked to the pandemic (eg UNEDIC, European Union emissions). Crédit Agricole CIB has made a long-term commitment to promote green finance with a coherent organization within the teams, from origination to distribution.
About Crédit Agricole Corporate and Investment Bank (Crédit Agricole CIB)
Crédit Agricole CIB is the corporate and investment bank of the Crédit Agricole group, on 12e the world’s largest banking group in terms of Tier 1 capital (The Banker, July 2020). Almost 8,400 employees in Europe, the Americas, Asia-Pacific, the Middle East and Africa support the Bank’s clients and meet their financial needs around the world. Crédit Agricole CIB offers its large corporate and institutional clients a range of products and services in the capital markets, investment banking, structured finance, commercial banking and international trade activities. The Bank is a pioneer in the field of climate finance, and is currently a leader in this segment with a complete offer for all of its clients.
Crédit Agricole CIB has been committed to sustainable development for many years. The Bank was the first French bank to sign the Equator Principles in 2003. It was also a pioneer in the green bond markets with the implementation of public transactions from 2012 for a wide range of issuers (supranational banks, companies, local authorities, banks) and was one of the co-authors of the Green Bond Principles and the Social Bond Guidance. Relying on the expertise of a team dedicated to sustainable banking and on the strong support of all bankers, Crédit Agricole CIB is one of the most active banks in the green bond market.
For more information, please visit www.ca-cib.com
