Green bond issuance dives almost a third amid climate backtracking
Data published by Sustainable Fitch showed overall "labelled" bond issuance, which also includes other types of sustainability-focused bonds, was down 25% year-on-year to $440 billion, with Q2 also the weakest quarter since 2019.
Green bonds — where the money raised is earmarked for environmental or climate projects — had a near $100 billion, or 32%, drop in the year, while the overall share of environmental, social and governance-labelled bonds has fallen back to 10.2% of total global bond issuance from 11.7% for 2024.
The drop-off comes as the U.S., under President Donald Trump, withdraws from a raft of global sustainability initiatives and rolls back environmental standards.
European Union policymakers are also negotiating proposals that would loosen the bloc's corporate sustainability reporting rules for a large majority of businesses.
Fitch said the main factor impacting the market was the uncertainty around capital expenditure, driven by macro challenges and geopolitical instability.
"Ongoing uncertainty over ESG-related regulations – amid implementation delays and rollbacks in the U.S. and EU – may be prompting issuers to wait for regulatory clarity," it added.
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