KUALA LUMPUR: Moody’s Investors Service expects green, social and sustainability bond issuance to reach combined US$850bil for 2021 after record first-half volumes.

The rating agency now anticipates global issuance of about US$450bil of green bonds and US$200bil each of social bonds and sustainability bonds.

“Volumes across the three segments totaled US$427bil in the first half of the year, more than double the same period last year, as market momentum continues to be exceptionally strong,” it said in its report.

Moody’s said sustainable bond issuance totaled US$189bil in 2Q of 2021, with US$94bil of green bonds, US$46bil of social bonds and US$49bil of sustainability bonds.

It pointed out sustainability-linked bond and loan volumes continue to surge.

Sustainability-linked bonds achieved a new quarterly record of US$31bil in the 2Q, more than three times higher than the US$9bil issued in 1Q.

“With the market’s exceptionally strong growth in recent quarters and growing market interest, sustainability-linked bond volumes could top US$100bil for all of 2021.

“Taken alongside use-of-proceeds sustainable bonds, this means overall sustainable bond volumes could approach US$1 trillion in annual issuance this year,” it said.

Moody’s said 2Q was also another record quarter for the sustainability-linked loan market, with US$156bil, which was a 54% growth over 1Q.