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Sustainable finance surges in popularity during H1 2021

Matthew Toole
Matthew Toole
Director, Deals Intelligence

The first half of 2021 has seen new records set for the issuance of sustainable finance, with Europe driving bond markets to new highs, and American interest growing in sustainable lending. Meanwhile, an M&A bonanza involving sustainable companies was driven largely by the Americas and Asia.


  1. H1 2021 has seen record levels of sustainable finance across debt, equity and M&A markets.
  2. Monetary values fell in Q2, but issuance numbers continued to surge as the classification enjoys broader traction across issuers.
  3. Sustainable finance accounts for one-tenth of global DCM, which was almost twice as much the proportion from a year earlier.

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The first half of 2021 has been a record period for sustainable financing activity, across the global M&A and capital markets.

In the debt markets, sustainable finance bonds had a record first half, to account for a remarkable 10.4 percent of the market, almost double the proportion of a year earlier. The market continues to be driven by European issuers, which account for 60 percent of the market.

Sustainable finance bonds hit new heights

Sustainable finance bonds surged 76 percent year-on-year to reach $552bn and an all-time first half record.

The first three months of the year were the biggest quarter on record, with Q2 easing off 10 percent from those highs. Despite this, the second quarter still managed to set the record for the number of issues – a signal that the classification is gaining wider traction across the issuer community.

Meanwhile, green bonds, which are financing products specifically designed to support climate or environment related projects, hit $259bn, nearly three times first half 2020 levels and all-time first half record. Again, despite a slight downtick in Q2, the number of issues between April and June set an all-time quarterly record of 361.

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Growing interest in sustainability bonds

Sustainability and social bond categories both set all-time records during the first half of 2021.

Sustainability bond issuance reached $47bn during second quarter 2021, up 7 percent on the previous quarter to an all-time record, pushing the first half total to $91bn, up 61 percent year-on-year. At the same time, the number of sustainability bond issuance rose 131 percent compared with the same period in 2020.

Meanwhile social bond issuance – which was bolstered by the European Union’s SURE bond programme earlier this year – contracted in the second quarter, falling 45 percent from its Q1 record high of $142bn.

The rising numbers and falling values in the second quarter across most categories could reflect a pull back from agency and sovereign issuance (which accounted for 42 percent of the market, down from 56 percent in 2020), and an increase in activity from corporates, which picked up the slack.

In terms of players, JPMorgan moved up by a 1.4 percentage point share of the market, to become the top underwriter spot for sustainable finance bonds, taking 5.8 percent of the total opportunity.

Sustainable lending surges

Sustainable lending reached $321bn during the first half of 2021, more than triple last year, and setting an all-time first half record. Unlike the bond markets, sustainable loans continued to surge into spring – up 35 percent in Q2 – with both quarterly periods surpassing $100bn.

When it comes to sustainable lending, the geographic split is slightly less Europe-centric, with the Americas accounting for 43 percent of the market or $139bn of deals, its highest share since records began.

Europe still clung on to first place – with a 45 percent, or $145bn – led by facilities for Italy’s Enel S.p.A and Belgium’s Interbrew-Simba. Meanwhile, the sustainable lending market in Asia-Pacific occupies a relatively niche 8 percent or $26.8bn.

BofA Securities jumped 4.7 market share points to take the top spot for sustainable syndicated loan mandated arrangers during the first half of 2021, with 6.8 percent market share, followed by JPMorgan with 5.4 percent and Citi with 4.6 percent.

How have equities, M&A and SPACs fared?

It was a similar story in the equity markets, with sustainable companies raising $23bn in the first half, triple the levels of a year earlier, and an all-time first-half record – albeit tailing off slightly during Q2.

For equity issuance, the Americas lead with a 41 percent market share, followed by Asia-Pacific taking a healthy 38 percent.

The market for sustainable equity issuance is relatively concentrated, with Morgan Stanley, Goldman Sachs and Citi taking almost one-third of the bookrunning market.

Driven by a record first quarter and strong deal volume, the big winner from the first half was the global M&A market, where activity involving sustainable companies more than quadrupled to hit an all-time record of $84bn from 466 deals.

The number deals increased 41 percent on the year, with China taking a 26 percent market share.

Citi took the top spot advising on sustainable M&A deals during the half, with $33.5 billion from 17 deals. BofA Securities and Goldman Sachs rounded out the top three.

Meanwhile the popularity of special purpose acquisition companies (SPAC) has spilt into the sustainability world, accounting for $44bn, or 52 percent of total announced M&A in the first half of 2021.


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