Prepared by Climate Bonds Initiative.
Sponsored by Citigroup, IFC and J.P. Morgan.
Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

SUSTAINABILITY
LINKED

TRANSITIONGREEN

SOCIALSUSTAINABILITYSUSTAINABLE DEBTGLOBAL STATE
OF THE MARKET
2022

1

1. Introduction
About this report

Contents
1. Introduction 2
2. Methodology 3
3. Report highlights 4
4. Green 7
5. Social and sustainability 12
6. Sustainability-linked bonds 17
7. Transition bonds 21
8. The Sovereign GSS+ Bond Club 22
9. Building resilience throughsustainable finance 26
10. Outlook 29
11. Appendices 30
12. Endnotes 32

List of Acronyms
A&R: Adaptation

KPI: Key performanceand resilience

indicator

ABS: Asset-backed

LAC: Latin America andsecurities

Caribbean

AFFLU: Agriculture,

METI: Japan’s Ministry

forestry, food, and land useof Economy, Trade, andBILs: Bipartisan

Industry

Infrastructure Laws

MDB: Multilateral

CBS: Climate Bonds

development bankStandard

S&S: Social andCBS v4: Climate Bonds

sustainability

Standard V4

SME: Small and

DM: Developed market

medium-sized enterprise

DRE: Distributed

SSBDB: Social andrenewable energy

Sustainability Bond

EM: Emerging market

Database

ESG: Environmental,

SBT: Science-basedsocial, and governancetargets

EU: European Union

SBTi: Science Based

FCA: Financial Conduct

Targets initiative

Authority

SBP: ICMA’s Social BondGBDB: Green Bond

Principles

Database

SDG: Sustainable

GBF: Global Biodiversity

development goal

Framework

SLB: Sustainability-

GBP: ICMA’s Green Bond

linked bondPrinciples

SLL: Sustainability-

GHG: Greenhouse gas

linked loan

GSS: Green, social and

SNAT: Supranationalsustainability

SPT: Sustainability

GSS+: GSS, SLB, andperformance target

transition bonds

TNFD: Taskforce on

IIJA: Infrastructure andNature-related Financial

Investment Jobs Act

Disclosures

IPR: Inevitable Policy

TPT: Transition Plan

Response

Taskforce

IRA: Inflation

UoP: Use of proceeds

Reduction Act

YOY: Year-on-year

This is the 12th iteration of Climate Bonds Initiative’s(Climate Bonds) Global State of the Market Report.
The scope of this report includes analysis of thegreen, social and sustainability (GSS) markets, plus
sustainability-linked bonds (SLBs), and transition
bonds. This report describes the shape and sizeof the GSS, SLB, and transition (collectively GSS+)
debt market as of 31 December 2022.

About the Climate
Bonds Initiative
Climate Bonds is an international organisation
working to mobilise global capital for climate
action. It promotes investment in projects andassets needed for a rapid transition to a lowcarbon, climate-resilient, and fair economy. The
mission focus is to help drive down the cost ofcapital for large-scale climate and infrastructure
projects and to support governments seeking
increased capital markets investment to meetclimate and greenhouse gas (GHG) emission
reduction goals. Climate Bonds conducts market
analysis and policy research; undertakes market
development activities; advises governments
and regulators; and administers a global green
bond Standard and Certification scheme. Climate
Bonds screens green finance instruments against
its global Taxonomy to determine alignment, andshares information about the composition of thismarket with partners. The Climate Bonds teamhas also expanded its analysis to other thematic
areas, such as social and sustainability bonds via
the development of screening methodologies
for investments that give rise to positive social
impacts and added resilience. Certification against
the Climate Bonds Standard (CBS) represents
about 20% of global green bond market volumes.
This scheme is underpinned by rigorous scientific

Criteria to ensure that Certified bonds and issuers
are consistent with the well-below 2˚C target of
the Paris Agreement. Obtaining and maintaining
Certification requires initial and ongoing thirdparty verification to ensure the assets meet the
metrics of sector Criteria.

Climate Bonds expands its
Certification scheme to include
corporate entities and SLBs
Certification under the Climate Bonds
Standard v4 (CBS v4) is expanding beyond
Use-of-Proceeds (UoP) instruments to include
non-financial corporate entities and their
SLBs. Launched in April 2023, the CBS v4 is amajor new development for Climate Bonds,
which has driven credible climate financing forover a decade. Drawing from its experience indeveloping detailed sector Criteria for assets,
activities and investments, Climate Bonds will
provide transparent science-based Criteria fornon-financial corporate entities, credible SLBs
and similar instruments, and assurance forinvestors that sustainability requirements havebeen met in respect of any Certified issuance.
This work goes beyond sectoral transition
pathways and includes key governance elementsthat indicate a company’s preparedness totransition to net zero. Certification will beavailable for corporates with emissions alreadynear zero as well as those with activities inhigh-emitting sectors, providing the corporate
has suitably ambitious performance targets
and credible transition plans. CBS v4 enables
corporates aligned with 1.5-degree pathways,
or those that will be aligned by 2030, to obtain
Certification. SLBs issued by and in respect of theactivities of qualifying non-financial corporates
can also be Certified under the CBS v4.

GSS+ scorecard

Green
Total sizeof market(cumulative)

SocialSustainability*

Transition

SLB

USD2.2tn

USD653.6bn

USD682.0bn

USD12.5bn

USD204.2bn

Numberof issuers

2,457

772

507

39

336

Numberof countries

85

49

57

12

50

Number ofcurrencies

49

42

41

7

21

*To avoid double counting, deals with multiple labels were classified as sustainability bonds.

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative22. Methodology
Scope of analysis
This report includes five sustainable debt
themes based on the projects, activities,
and expenditures financed: green, social,sustainability, SLB, and transition.
The GSS+ themes can be described as follows:
Green: dedicated environmental benefits(captured since 2012).
Social: dedicated social benefits(captured since 2020).
Sustainability: green and social benefits combined
into one instrument (captured since 2020).
SLBs: changes in coupon (almost always
step-ups) linked to performance against entitylevel sustainability performance targets (SPTs)(captured since 2021).
Transition: UoP supporting transition at activity
or entity level (captured since 2021).

Methodology overview
This report draws on three Climate Bonds databases:
1. Green Bond Database (GBDB)
2. Social and Sustainability Bond Database (SSBDB)
3. SLB and Transition Bond Database
To qualify for inclusion, debt instruments musthave a label. Green, social, sustainability, andtransition bonds must finance sustainableprojects, activities, or expenditures. SLBs must
annunciate credible and ambitious transition
SPTs. Debt labels describe the types of projects,
activities, or expenditures financed, and/or
their benefits. Green, social, sustainability, andtransition are the most common labels, but abroad range of labels is used (see Appendix 1).

Green
All deals in the green theme havebeen screened to verify the integrityof their green credentials. Screening
is based on a set of process rules stipulated in
the Climate Bonds GBDB Methodology, including
carrying a label and all net proceeds verifiably(through public disclosure) meeting Climate
Bonds’ green definitions derived from the
Climate Bonds Taxonomy.1

Social and sustainability
Social and sustainability (S&S) deals
are classified based on the UoP(which is typically related to thedeal’s label), as follows:

Transition bonds

Sustainability: UoP includes a
combination of green and social
projects, activities, or expenditures,e.g., renewable energy, low-carbon
transport, employment generation andgender equality.
Social: UoP is exclusively related to social
projects, e.g., health, employment, genderequality, affordable housing, etc.
Any instrument financing only green projects
is included in the GBDB should it meet
eligibility requirements, irrespective of its
label (e.g., an SDG bond that only finances
solar energy). A sustainability-labelled bondthat only finances social projects will fallunder the social theme, whereas one that
finances a combination of green and social
would be considered to fall under thesustainability theme.

Sustainability-linked bonds
SLBs raise general purpose financeand involve coupon step-ups or,occasionally, step-downs linked tothe achievement of pre-defined, time-bound
SPTs. Climate Bonds has developed a screening
methodology for SLBs as transition instruments.
This methodology, as well as the SLB database,are expected to launch in Q2 2023.

Climate Bonds records but does notscreen transition bonds. A transitionbond has UoP earmarked for
activities that are not low- or zero-emission (i.e.,
not green), but have a short- or long-term role toplay in decarbonising an activity or supporting
an issuer in its transition to Paris Agreementalignment. The transition label enables inclusionof a more diverse set of sectors and activities
and includes labels such as blue transition andgreen transition. At present, transition bonds
predominantly originate from highly polluting
and hard-to-abate industries such as extractives
like mining, materials such as steel and cement,
and industrials including aviation and shipping.
As Criteria are developed, Climate Bonds will
update its GBDB methodology and then begin
screening bonds from issuers in those sectors
for inclusion, whether labelled as transition or
as green. The Climate Bonds Taxonomy defines
the assets and activities that are aligned with a
1.5-degree pathway, accepting financing witheither label. In 2022, Climate Bonds launched
Criteria for Basic Chemicals, Cement, Hydrogen
Production, and Steel. Entities operating in those
sectors can now refer to the Criteria to determine
the appropriate assets, projects and expenditures
for inclusion in a green or transition bond.

New Climate Bonds sector Criteria for UoP bonds

CementBasic Chemicals

HydrogenExcludes mining,
stainless & highalloy steels

Excludesconcrete mixing& standalone
limestone
quarrying

Only basic
chemicals

Hydrogenproduction

Technology-specific

3-year pathway
check OR meetaverage pathway
value for bondtenor at timeof Certification

EU Taxonomy

Estimations
and assumptions
based on EU
Taxonomy

Steel
Mitigation
criteria
Adaptation& resilienceUse-of proceeds instruments
Coverage

New assets
Mitigation
measures/retrofits
Pathway
thresholds

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative3

3. Report highlights

Sustainability

1000

Green

Social800

SLBTransition

600
400
200
0

• Climate Bonds captured GSS+ debt amounting
to USD858.5bn in 2022.

<2015

2017

2016

2018

2019

January was the strongest month in 2022

• The invasion caused energy price spikes,
driving high inflation. The expectations andconsequences of rising interest rates rapidly hit
the debt market, and issuance in all categories
of bonds declined in 2022 – this extended tobonds bearing thematic labels (-24% YOY).
GSS+ deals contributed 5% to total debt
market volumes, the same as in 2021.2

USD Billions• GSS+ deals were priced in 40 currencies. The
top three currencies were together responsiblefor 81% of the volumes, including 42% priced
in EUR. Investors in the region have theimmediate advantage of a broader investible
opportunity set.

2022

120
SocialGreen

90

Sustainability

SLB

Transition

60
30
0
Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Source: Climate Bonds Initiative

The USA was the largest country source of GSS+ debt in 2022

• The social theme experienced the biggest
drop of 41% YOY. Issuers are no longer
tapping the debt market to fund the COVID-19
recovery, favouring instead the combinationof social and environmental UoP under thesustainability label.

SocialGreen

120

Sustainability

SLB

Transition

90

30

UK

pa
n
Ja

ly

Ko
re
a

la
n
er

h
ut

ds

y
an

Ne
th

in

a

Ge
rm

Ch

ce
Fr
an

na
at
io

US
A

0

l

USD Billions

60

Su
pr
an

• Supranationals dominated the top ten sourcesof thematic debt in 2022, with USD115.9bn
in volumes across all three GSS categories.
The USA was the largest country source andpriced the highest share of sustainability deals(USD21.5bn). China produced the largest
volume of green bonds (USD85.4bn), France
owned social bonds (USD54.5bn), Italy was
top in SLBs (USD14.7bn), while USD1.9bn oftransition debt originated from Japan.

2021

Source: Climate Bonds Initiative• January was exceptionally strong with GSS+
issuance reaching almost USD119bn, 88%
more than the USD62bn priced in January
2021. Issuers began to grow nervous in
February with the threatened Russian
invasion of Ukraine happening towards theend of that month.

• Transition was the only theme todemonstrate growth, expanding 5% YOY albeit
from a small base. The number of transitionbond issuers almost tripled. This reflects thestrong policy support the label has received
in China and Japan.

2020

Ita

The sustainable debt market in 2022

1200

So

Market analysis

GSS+ volumes reached USD858.5bn in 2022

USD Billions

By 31 December 2022, Climate Bonds hadrecorded GSS+ debt instruments with acumulative volume of USD3.7tn. In 2022,
Climate Bonds captured USD858.5bn of new
GSS+ volumes, 24% below the USD1.1tn
recorded in 2021. Green remained the dominanttheme, taking 58% of the total with volumes of
USD487.1bn.

Source: Climate Bonds Initiative

42% of the volumes were priced in EUR
JPY 2%
GBP 3%

Other
13%
EUR
42%

CNY
10%

USD
29%

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative4

Green bond market scorecard

Social bond market scorecard

2022

2021

Size of market

USD487.1bn

USD582.4bn-16%

Number ofissuers

741

976

Average sizeof instrument

USD140m

Number ofcountries
Number ofcurrencies

2022

2021

Size of market

USD130.3bn

USD219.5bn

-41%

-24%

Number ofissuers

153

183

-16%

USD124.6m

12%

Average sizeof instrument

USD55.2m

USD90.5m

-39%

51

62

-18%

Number ofcountries

27

30

-10%

33

35

-6%

Number ofcurrencies

24

27

-11%

Change YOY

Change YOY

Sustainability-linked bondmarket scorecard

Sustainability bond market scorecard
2022

2021

Size of market

USD161.3bn

USD204.1bn-21%

Number ofissuers

206

262

Average sizeof instrument

USD131.9m

Number ofcountries
Number ofcurrencies

2022

2021

Size of market

USD76.4bn

USD112.1bn

-32%

-21%

Number ofissuers

142

190

-25%

USD176.1m-25%

Average sizeof instrument

USD372.6m

USD437.9m

-15%

36

47

-23%

Number ofcountries

35

36

-3%

28

31

-10%

Number ofcurrencies

16

18

-11%

Change YOY

Transition bond scorecard

Change YOY

Spotlight sections

2022

2021

Size of market

USD3.5bn

USD3.3bn

Number ofissuers

25

9

178%

Average sizeof instrument

USD100.4m

USD278.5m-64%

Number ofcountries

3

7

-57%

Number ofcurrencies

3

6

-50%

Change YOY
5%

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

This paper includes spotlight analyses of two topics which are
expected to impact the GSS+ market in the coming year.

The Sovereign GSS+ Bond Club
Sovereign issuers wield the ultimate power in the GSS+ market due totheir size and influence. This issuer category has massive potential topush the climate, social, and biodiversity agendas forwards and canhelp to galvanise action from the private sector. This section highlights
key market developments in 2022.

Adaptation and Resilience (A&R)
The GSS+ debt market has emerged as a prominent vehicle forchannelling demand from investors towards climate action. While
resilience is already being financed in the GSS+ debt market, financial
instruments clearly designed and labelled to support resilient
investments remain scarce. Through its Global Climate Resilience
Programme, Climate Bonds aims to provide the market with clearer
definitions and rulesets to enable sovereign, sub-national, andcorporate debt issuers to finance projects that increase physical,
social, economic and ecosystem dimensions of resilience.

5

Size matters: Green bond issuance rankings in 2022
Largest Green Bond
European Union
Amount: USD6.5bn
UoP: (1) Research andinnovation activities supporting
the green transition, (2) Digitaltechnologies supporting thegreen transition, (3) Energy
efficiency, (4) Clean energy
and network, (5) Climatechange adaptation, (6)Water & waste management,(7) Clean transport &infrastructure, (8) Nature
protection, rehabilitation andbiodiversity, (9)Other enabling
activities

Largest Sovereign
Green Bond
Republic of Italy /Federal Republicof Germany

Largest Certified
Climate Bond
Dutch State Treasury
Agency / China
Development Bank

Amount: USD6.1bn(reopening) / USD4.9bn(new bond)Amount: USD5.2bn(reopening) / USD2.3bn(new bond)

UoP: Renewable energy,transport, building, water,
waste, and land use /Transport, international
cooperation, R&D, energy
and agriculture

UoP: Delta Plan, i.e., theworld’s most advanced andsophisticated floodplain
management system / Lowcarbon transport

LargestDevelopment BankGreen Bond
European Investment
Bank (EIB)

Largest Financial
Corporate
Green Bond

Largest Green
Sukuk
Republic of Indonesia
Amount: USD1.5bn
UoP: Renewable energy,transport, building, waste,
land use, and climate change
adaptation>USD45bn
USD15-45bn
USD5-15bn
USD1-5bn<USD1bnAmount: USD4.3bn
UoP: Low-carbon transport,
energy efficiency andrenewableenergy projects

Bank of China
Amount: USD4.7bn
UoP: Renewable energy,
low-carbon transport, waste
recycling, water

Largest NonFinancial Green
Bond
Société duGrand Paris*
Amount: USD1.9bn
UoP: Low-carbon transport,i.e., Paris metro project*GBE

Sustainable Debt, Global State of the Market 2022 Climate Bonds Initiative6

4. Green
China surpassed the USA as the main source of green debt in 2022

• Many countries committed some portionof their fiscal spending to accelerate thetransition to a low-carbon economy. Several
European Union (EU) member states
continued to issue green bonds, France
being the most consistent country in its sixth
consecutive year of issuance. Newcomers to
the Sovereign Green Bond Club were Austria,
Canada, Denmark, New Zealand, Singapore,and Switzerland.
• The global energy crisis has fuelled cleanenergy policy in the world’s largest economies.5
As governments worldwide keep expanding
their climate ambitions, more capital is being
earmarked to increase renewable energy
capacity and nascent technologies, such as
green hydrogen.

80

160

70

140

60

120

50

100

40

80

30

60

20

40

5

20

0

0

UK
Sp
ai
n
Ita
ly
Ja
pa
Ca n
na
Sw da
e
De den
nm
a
No rk
rw
Be ay
lg
iu
m
Ot
he
r

180

na

• To date, green bond demand has far exceeded
supply. This continued in 2022 and issuersof green bonds remarked that investors
describing themselves as green or socially
responsible helped to get deals over the line.4

90

Ch
i

• The green label continues to dominate global
thematic debt issuance, ending the yearwith 56% of GSS+ volumes and lifting the
cumulative total of the segment to USD2.2tn.

USD Billions• Prevailing market
conditions fuelled a decline in debt issuancevolumes across all categories of bonds.
Green bonds maintained 3% of overall
issuance volumes.3

Issuer countNumber of issuers

Amount issued• In 2022, green bondissuance experienced
its first YOY drop fora decade, reaching
USD487.1bn (16% lower
than 2021 volumes).

U
Su Ger S
pr ma
an n
y
Ne atio
th na
er
l
la
nd
Fr s
an
ce

Introduction

Top 3 green bond market
trends in 2022
1. The green bond market was somewhat
affected by the global market turmoil throughout
2022, such that issuance was lower comparedto the prior year. However, it did hold its own,
maintaining c. 3% of the total issuance volume.
2. With respect to disclosure, achieving anadequate level of rigour in a rapidly evolving
market remained a key challenge in 2022. As
more rules are developed, and processes andmetrics for measuring the impact of investments
evolve, it can be challenging for issuers tokeep pace. Issuers need to keep informed
and evolve with the market, but overall willneed to strengthen their entity level-reporting
capabilities.
3. Most of GSS+ bonds with A&R-related UoP
issued in 2022 were labelled as green (53%)(see spotlight section on Resilience on page 26).

The 2022 green bondmarket in numbers
TOP 3 COUNTRIES
1. China USD85.4bn (18%)
2. USA USD64.4bn (13%)
3. Germany USD61.2bn (13%)

TOP 3 ISSUERS
1. European Union, Supranational (SNAT)(USD26bn)
2. European Investment Bank (EIB), SNAT(USD14.5bn)
3. Federal Republic of Germany,
Germany (USD14.3bn)

TOP 3 MOST FREQUENT ISSUERS
1. Ginnie Mae (431 deals)
2. Fannie Mae (263 deals)
3. Deutsche Bank (71 deals)

Green loans
Green loans are a form of financing that enables
borrowers to raise capital for projects that havea positive environmental impact. Like green
bonds, they are dependent on environmental
or climate criteria for the planned UoP.
However, these loans differ from green bonds
because they are typically smaller in sizeand done via a private operation. Anotherimportant difference, particularly in thesustainable finance market, is that loans
generally have more opaque disclosure given
they tend to be privately (often bilaterally)

arranged. This means it is often hard to (i)discover relevant deals, and (ii) find essential
information about the deals, including details
such as loan amount and term, as well as UoP.
Climate Bonds tracks green loans within the
Climate Bonds GBDB, but with the caveat that
this data is collected on a best-efforts basis(unlike green bonds, where the confidence levelis much higher) and deals may take longer tobe added to the database. Green loan figures
included in this report are therefore indicativeand should be treated as such.

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

As of 20 January 2023, Climate Bonds
captured USD10.4bn of green loans priced
in 2022. The addition of 49 loan instruments
contributed 19% to the cumulative total of 263.
Green loans constituted 2% of the market in2022, and 70% of the volume originated from
Asia-Pacific and Europe combined (35% each).
At present, Climate Bonds does not track
S&S loans in the SSDB, nor sustainabilitylinked loans (SLLs) among general purpose
instruments (only SLBs).

7

One new market,
382 new issuers
The Dominican Republic was the only country
to join the green bond market in 2022, as
the country’s major public-private power
generation company Empresa Generadorade Electricidad Haina (EGE Haina) made its
debut with a USD20m bond. The proceeds were
earmarked for the expansion of the installedcapacity of its wind farm from the current 176 MW
to 296 MW.
The 382 debut green bond issuers accounted for
USD142bn of green volumes, or 29% of the 2022
total. Non-financial corporates were responsiblefor 37% of debut issuer volume. With USD9.6bn
and 431 deals, Ginnie Mae was the top debut
issuer. The Republic of Austria made thesecond-largest contribution to debut volumes,
printing two deals with a total of USD5.3bn. The
Government of Canada placed third, with asovereign green bond worth USD4bn.

Geographical contribution
Two-thirds (67%) of 2022 green bond volume
originated from developed markets (DM), 23%from emerging markets (EM) and 9% from SNAT
issuers. Volumes shrank in all regions YOY, except
SNAT which stood at USD45.1bn, a 43% increase
from the prior year.
The bulk of SNAT growth was driven by theEU’s extensive green bond programme, which
since its debut in October 2021 has issued acumulative total of USD39.9bn over four deals.
This is part of the European Commission’s efforts
to fund up to 30% of its NextGenerationEU
recovery plan by issuing dedicated green bonds,
aimed at generating multiple benefits for theEU, capital markets, and sustainable finance.
Stated objectives include (i) bringing a newhighly rated and liquid green asset to the market,
giving access to green investments for a wide
range of investors; (ii) helping the European
Commission access a wider range of investors;(iii) allowing investors to diversify their portfolioof green investments with a highly rated liquid
asset, thereby potentially accelerating a virtuous
circle of sustainable investments; (iv) further
boosting the green bond market and serving as
an inspiration to other issuers; (v) strengthening
the role of the EU and the Euro in the sustainablefinance markets.6

Pending green bonds
As of 20 January 2023, USD20bn of green
bonds priced in 2022 remained underassessment (pending) for inclusion in the
Climate Bonds GBDB. While the size of thegreen bond market has broadly experienced
an exponential upward trajectory in thepast decade, there is lack of standardised
information and common definitions acrossglobal markets, which would boost the growthof a cohesive market.
The buildings industry and property
sector represent a particular challenge. A
wide range of building certification schemes
and energy efficiency ratings are used acrossthe market as evidence of green impact.
Issuers’ public disclosure on the carbon
mitigation aspect of the assets funded via
green bonds is often inadequate. Climate
Bonds seeks high levels of ambition fromgreen bond issuers, supporting deals thatdeliver decarbonisation sooner and that help
keep global warming to 1.5 degrees. Only
highly rated, well-established international
and local certification schemes and energy
performance rating schemes are eligible forinclusion in the GBDB.
Another key challenge relates to the lackof CO2 emissions levels for low-carbon
transport vehicles. This asset category isoften presented with no eligibility thresholdby issuers. As the market develops, newlow-carbon technologies make alternatives
mainstream. Low-carbon vehicles should
adhere to a maximum of 50gCO2/p-km to theend of 2025 and zero thereafter.
Assets that are not supportive of rapid
decarbonisation are not eligible for inclusion in
the GBDB.

Cumulative regional green bond issuance since 2006
RegionGreen bondmarkets

Issuers

Amount issued(USDbn)Africa924

4.7

Asia-Pacific

23

973

512.7

Europe34647

1,001.9

Supranationals

-

17

168.5

Latin America

16

130

37.5

North America

2

669

434.2

The growth in Asia-Pacific, the second largest
region, can be attributed to the increasing
weight of financial corporate issuers in themarket, which contributed USD51.8bn or 39%
of its issuance in 2022 (2021: USD39.7bn or28%). The top three most prolific Asia-Pacificcountries were China (USD85.4bn and 332
deals), Japan (USD12.6bn and 69 deals) andSouth Korea (USD7.9bn and 30 deals). China’s
strong performance (up 22% from 2021) was
driven by the top three regional issuers: Bankof China (USD12.8bn and ten deals), China
Development Bank (USD7.8bn and six deals)
and China Three Gorges Corporation(USD5.1bn and 14 deals).

Change2021-2022

The 2022 green bondmarket in numbers
DEAL SIZE• 14% of deals were benchmark-sized(USD500m+)• Average deal size USD140m (2021:
USD125m)

DEAL CURRENCY• 79% of issuance in hard currency (2021:
81%)• Deals issued in 33 currencies (2021: 35)• Top 3 currencies: EUR, USD, CNY

EXTERNAL REVIEWS• 16% of deals received an external review(2021: 10%)

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

8

Corporates contributed 54% of green volumes
Sovereign

Non-Financial Corporate

Local Government

Financial Corporate

Development Bank

Government-Backed Entity

100%

80%

60%

40%

20%

The private sector fuelled 2022
market growth
Private sector issuers were responsible formost of the green volumes in 2022, with a slight
drop to 54% from 58% the prior year. Financial
corporates made the largest contribution with
29% of volumes, while 25% originated fromnon-financial corporates. European corporates
were responsible for just under half of private
sector green bond issuance, the two mostprolific issuers being German commercial bankHelaba (USD5.2bn and 45 deals) and Danish
multinational power company Orsted (USD4bn
and six deals).
Just under a fifth (19%) of 2022 green bondissuance originated from government-backed
entities, which was the only issuer type torecord an increase versus 2021 (up 6%). Growthin this segment was driven by the EU, addressed
above, which reopened its 2037 deal three times
for a total of EUR6.5bn (USD6.9bn) to fund a
broad range of UoP categories leading to GHG
emission reductions and adaptation measures.
By volume, Fannie Mae took the second
spot with USD10.2bn, and was also second
by number of deals (263), after Ginnie Mae(USD9.6bn, 431 deals).

22
20

21
20

20
20

19
20

18
20

17
20

16
20

15
20

14
20

13
20

12
20

11
20

10
20

09
20

08
20

07
20

20

06

0%

Top green non-financial corporate issuers, 2022
2022
Issuer name

Cumulative totals

USDbn

Numberof deals

USDbn

Numberof deals

China Three Gorges Corporation

5.1

14

13.7

34

Orsted

4

6

9.4

15

Iberdrola

3.1

4

8.7

12

Honda Motor Company

2.8

3

2.8

3

Volkswagen

2.6

3

2.6

3

E.ON

2.6

3

7.6

8

EDP

2.4

3

2.4

3

General Motors

2.3

2

2.3

2

RWE

2.1

1

4.3

4

Huaneng Lancang
River Hydropower

2

16

2.5

22

Largest deal in each issuer type, 2022*
Issuer type

IssuerUSDbn

Development bank

EIB

4.3

Financial corporate

Bank of China

4.7

Government-backed entity

EU

6.9

Local government

Province of Ontario

2.1

Non-financial corporate

RWE

2.1

Sovereign

Republic of Italy

8.2*Includes reopenings/taps

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

9

Green bonds: an opportunity for biodiversity

In 2022, 60 bonds were issued with UoP for
biodiversity protection projects. Europe was
the source of 46 deals, and UoP included
financing in line with national biodiversity
strategies, conservation of flora andfauna, forest protection and protection of
Natura2000 sites (a coordinated network ofprotected sites for the breeding and restingof threated species). Some bonds specificallylisted protection of endangered species toencourage recovery of wild species numbers.
Bond issuance from agriculture, forestry, food,and land use (AFOLU) can impact biodiversity
protection. Deals that support a variety ofcrops encourage a systemic shift away frommonocultures and allow for diversification in crop
genes, encouraging greater wildlife presence,
better resilience in the face of climate change,
and better protection against soil degradation.
Proceeds were also earmarked for aquaticand marine protection, reducing overfishingand healing fish stock numbers to aid marine
recovery and improve diversity of aquatic life.
Marine forests are highly efficient at storingcarbon, and preservation of these areas istherefore crucial.
Deals from Asia-Pacific allocated UoP togeneral biodiversity protection, habitat
enhancement, nature corridors and wetland

Issuance with ‘biodiversity’ mention within agriculture
and land use bonds globally in 2022
50
40
30
20
USD Billions

Biodiversity is a vital aspect of bio-economy
protection, and species variation provides
the foundation for food systems, ecosystems,
and terrestrial and aquatic life. The increased
profile driven by COP15, the Global Biodiversity
Framework (GBF) and the work of the Taskforce
on Nature-related Financial Disclosures (TNFD)
have catalysed an expansion in issuance with
UoP targeting biodiversity protection andrestoration compared to 2021 levels.

100
Non-Financial

Financial
Institutions

Sovereign/ Government
Source: Climate Bonds Initiative 2022

recovery as part of action to protect naturalareas. This included a CNY1bn (USD139.5m)
2025 maturity non-financial issue from China
Tiegong Investment & Construction Group, with
100% of UoP going to restoration of biodiversity,and two sovereign green bonds from Hong
Kong SAR (HKD20bn; USD2.5bn) and Singapore(SGD2.4bn; USD1.8bn).

Issuance with ‘biodiversity’mention within agriculture andland use bonds in 2022 by region
LAC 2%
North America 5%
Supranational 12%
Asia-Pacific 5%

Globally, 45 sovereign and government-backed
deals have indicated national-level interest in
biodiversity protection in line with international
agreements, such as the GBF and SDGs. This
included sovereign issuance from Hungary withexpenditures earmarked for improving national
biodiversity; and the UK UoP for the Future
Farm and Countryside Programme, which aims
to improve terrestrial and marine biodiversity.
The EU earmarked UoP for protection of Natura
2000 sites. Among the 45 deals, 36 included
agricultural UoP for projects such as certified
organic agriculture, soil restoration, low-impact
agriculture and sustainable fisheries, making thecritical link between biodiversity and agriculture.

Europe77%

Source: Climate Bonds Initiative

EUR is the preferred currency

Top 10 currencies in 2022: CNY increases share

In 2022, hard currencies were the source of 79%
of green bond issuance. CAD and NZD were theonly currencies to experience an upward trend,by 10% and 153% respectively. Both Canada and
New Zealand priced debut sovereign green deals
in their respective local currencies in 2022.

100%

EUR was the preferred currency for the fifth
year in a row. The 357 EUR-denominated deals
from 170 issuers in 2022 lifted the currency’s
cumulative volume to USD922.1bn. Europe is thesource of the most advanced policy measuresand largest number of dedicated investment
mandates, hence the region has dominatedgreen bond issuance. Issuers bringing EURdenominated debt can maximise exposure andinvestor diversification.

40%

80%
60%

20%
0%
2018

2019

2020

EUR

USD

CNY

GBP

CAD

JPY

AUD

DKK

SGD

Other

2021

2022

SEK

Source: Climate Bonds Initiative

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

10

Preference for benchmark-sized deals
100%

150

Average deal size grew

80%

120

60%

90

40%

60

20%

30

0%

0

Benchmark-sized deals (USD500m and above)
accounted for 69% of the volumes in 2022,
slightly up from 67% the prior year. Small deals
are the most frequent by number, with 88% of
green bonds below benchmark size and over
two-thirds falling into the <USD100m bucket.
The average size of green bonds increased to
USD140m from USD124m in 2021.

More shorter tenor deals
Short-to-medium tenors prevailed among green
bonds, as one would expect in a rising rateenvironment. YOY contribution from this segment
increased slightly from 64% to 66%. The largest
tenor category in 2022 comprised bonds maturing
within five years (38% of volumes), followed by
28% falling into the 5-10-year bucket. The public
sector accounted for 80% of the longest tenor
bucket (20-years and above), with sovereigns
making up 39%.

2018
0-100mCertification under the CBS ensures that assets,
projects and expenditures financed by theverified green bonds are compliant with the Paris
Agreement. The number of Certified Climate
Bonds declined to 88 from 105 in the prioryear. While the number of corporates seeking
Certification decreased YOY, the number ofCertified deals from government-backed entities
was up 47%. Most of the 2022 Certified Climate
Bonds volume came from issuers in Asia-Pacific(45%), followed by European issuers (37%).
Notable Certifications included:• The Dutch State Treasury Agency (DSTA)
issued the first European sovereign green
bond to obtain Certification under the
CBS when it was originally priced in 2019,
subsequently extended to reopenings
including a EUR5bn tap in 2022. The deal
was Certified under multiple Climate Bonds
Criteria, i.e., Solar, Marine Renewables, LowCarbon Buildings (Upgrades), Low-Carbon
Transport, and Water Infrastructure.

500m-1bn

2021

2022

1bn or more

Average

Short-dated bonds prevail
180

USD Billions

Second party opinions (SPO) remain thepreferred option, with Certification under the CBS
being the second-largest category.

100-500m

2020

Source: Climate Bonds Initiative

Issuance from Asia-Pacific was dominated byshort-dated bonds (up to five years), while DM
volumes were more skewed towards longer
tenors. Saudi Arabia’s Public Investment Fundpriced the first century green bond in October.
The USD500m 2122 maturity was part of a threetranche deal including USD1.25bn maturing in
2027, and the same amount in 2032.

External reviews

2019

USD Millions (Average size)

The Asia-Pacific market share increased
YOY driven by Chinese issuers, reflected in a
21% uptick in CNY-denominated issuance to
USD73.3bn in 2022.

160

Supranational

140

North America

120

Latin America

100

Europe80

Asia-Pacific60

Africa40200Perpetual>20Y

10-20Y

5-10Y

Up to 5Y
Source: Climate Bonds Initiative• Large Certified deals included China
Development Bank (USD4.3bn) andAgricultural Bank of China (USD2.8bn).

Largest Verifier for
Certified Climate Bonds• Calpine Corporation (USD1.8bn) was thelargest Certified green loan, under Climate
Bonds’ Geothermal Criteria.

Sustainalytics

Some issuers sought external reviews frommultiple sources, hence the sum of external
review volumes is greater than the total amountof green bonds issued.

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

Amount: USD11.5bn

Largest External
Review Provider
CICERO
Number of deals: 563

11

5. Social and Sustainability
SUSTAINABILITY

EUR
35.8bnSustainability issuers like USD
USD was the dominant currency, representing
45% of total issuance. Most EM issuers prefer
USD over their national currency as it is a stable
hard currency with global acceptance for trade,enabling issuers to access international markets.
EUR and AUD took the second and third spots,with 21% and 7% respectively.

Source: Climate Bonds Initiative

Sustainability sources diversify
Sustainability deals originated from 38 countries
in 2022, a decline from 47 in 2021. Six newcomers
joined the sustainability bond market in 2022:

Hard currencies made up 84% of issuancealthough nothing was priced in CHF in 2022.
By the end of 2022, sustainability bonds had
been issued in 41 different currencies, 28 ofwhich were used during the year.

• Croatia (USD200m)• El Salvador (USD100m)• Romania (USD247m)• Saudi Arabia (USD750m)• South Africa (USD134m)

Development
Bank68.7bnSupranationals (USD53.2bn), USA (USD21.5bn),
South Korea (USD12.4bn) and France(USD10.2bn) continued to be responsible for thelargest volumes in 2022, unchanged from 2021.

Source: Climate Bonds Initiative

USA, South Korea and France topped country issuance in 2022
50

750

TOP 3 REGIONS

Amount issued

40

600

150

0

0

Th
a

ex
i

M

h

na
at
io
Su
pr
an

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

nd

10

co

300

Ko
re
a
Fr
an
ce

20

US
A

450

l

USD Billions

1. Supranational USD52.3bn (32%)
2. USA USD21.5bn (13%)
3. South Korea USD12.4bn (8%)

Issuer count30

ut

TOP 3 SOURCES

So

1. Supranational USD52.3bn (32%)
2. Europe USD33.6bn (21%)
3. Asia-Pacific USD32.6bn (20%)

ila

The 2022 sustainability bondmarket in numbers

Number of issuers

Financial
Corporate
56.2bnAUD 11.5bn

y

Local
Government
29.1bnGovernmentBacked Entity
94.4bn65 new issuers entered the sustainability bondmarket, increasing the total number by
6% to 1223.

an

Sovereign 15.1bn

USD
74.5bn

GBP 8.3bnrm

Non-Financial
Corporate 28bn

THB 7.7bn

UK

The public sector dominated
S&S issuance in 2022

The market was supported by deals from
SNAT issuers, responsible for USD52.3bn
or 32% of the volumes.

Ge

Government-backed entities made thelargest contribution (32%) with USD94.1bn.
Development banks placed second with
USD68.7bn or 24% of the 2022 total.

ile

Social bonds fell by 41% YOY to USD130.2bn
while issuance under the sustainability theme
declined 21% to USD161.3bn.

KRW 5bn
JPY 5bn
MXN 4.9bn
CAD 3.4bn
PHP 1.4bn
Others 8.9bn

The volume of bonds
issued under thesustainability theme
declined by 21%
YOY in 2022. This
reflected prevailingmarket conditions,but sustainability bonds maintained theircontribution of 1.2% to total issuance.7

Ch

The drop in overall S&S issuance was due toa decline in COVID-19 related activities, which
particularly hit volumes in the social theme.

Introductionpan

S&S bonds captured by Climate Bonds droppedby 31% YOY to USD291.5bn (versus USD423.7bn
in 2021).

USD dominated sustainability
bonds

Ja

Introduction

Source: Climate Bonds Initiative12

Policymakers must boost Africa’s transition prospects
Africa is one region
with an abundance of
projects which could be
funded by thematic debt.
According to FSD Africa,
the continent requires
almost USD2.8tn by
2030 to achieve its net-zero goals, while only
12% of this need is currently being met.9 The
persistent problem is a mismatch between
risk appetite of investors and the risks inherent
in the available projects, which include but
are not limited to country and regulatory
risks, and the credit risk of available projects.
Policymakers need to step in with de-risking
tools to make investment possible.
Climate Bonds has published 101 Sustainable
Finance Policies for 1.5OC, which includes
multiple suggestions to address this issue.
Some examples are summarised below.10

How DM and development banks can help:• Policy 13: DM to EM sovereign-tosovereign guarantees can de-risk local
currency sovereign issuance. The highinvestment risk and low credit ratings ofsome sovereign issuance can be addressedby sovereign-to-sovereign green guarantees,
provided by DM governments on EM green
sovereign issuance. These could follow themodel of multilateral development bank
(MDB) guarantees on sovereign issuance.
• Policy 19: Increase blended financeprovision. Blended finance works byisolating the riskiest portion of a project into
a separate investment. This junior capitaltranche (so named because it would absorb
the first losses in the event of bankruptcy)
can then be bought by the public sector. The
remaining lower risk (senior capital) could
be offered to private investors with moreconservative risk profiles in blended financedeals. Including other de-risking facilities
such as policy risk hedging can protectfrom negative market fluctuations and canfurther increase financing flows, especially
important in EM where access to long-term
capital is limited.
• Policy 23: Green export finance.
Export finance and development finance are
key to addressing market gaps by financing
less commercially attractive investments
such as long-term infrastructure. Export credit
agencies facilitate domestic companies’
access to international markets by providing
loans, guarantees and other instruments
to reduce the risk of exporting goods andservices. A government can exclude fossil fuelactivities from trade finance instruments andend related overseas export credit.

What EM nations can do:• Policy 10: Encourage the use of green
and sustainable finance instruments
through subsidies and incentives
which reduce the cost of green capitaland ensure attractive returns. Tax
incentives can be used to increase green
and sustainable investment. For example,
by making the interest from green bondholdings tax-exempt. This could follow themodel of tax exemption for US municipal
bonds. Tax credit bonds could also be used;bond investors receive tax credits instead ofinterest payments, so issuers do not have to
pay interest on their green bond issuances.
These incentives can help tilt investment togreen activities and the resulting increase ininvestor interest and demand will encourage
issuers to issue green bonds.
• Policy 12: Green finance subsidies.
The government can also provide
subsidies to green bond issuers. Interest
rate subsidies, or stamp duty exemptions
could be applied to green bond issuance.
However, such a policy faces a risk ofsubsidy allocation being dominated by large
corporates which do not require subsidies.
Reserving such polices for where it is mostneeded, i.e., small and medium-sizedenterprises (SMEs), ensures the efficacy ofsuch spending. Subsidies can also cover thecost of verification and external review.
• Policy 34: Distributed renewableenergy standards. For many EM
economies, the energy transition will consistof decarbonising local energy production
and addressing energy poverty. This requires
investment in distributed renewableenergy (DRE). Financial aggregation
can enable private investment in theseprojects, providing capital for DRE andenabling investor portfolio diversification.
Establishing asset-backed securities(ABS) markets in EM would help with this.
Aggregation may need to be combinedwith other de-risking mechanisms such asconcessional financing, guarantees andsubsidies to de-risk fully.

The 2022 sustainability bondmarket in numbers
LARGEST ISSUER
By volume: International Bank for
Reconstruction & Development (IBRD),
USD30.7bn
By deal count: New York City Housing
Development Corporation, 164 deals
amounting to USD1.65bn

DEAL CURRENCY• 84% of issuance in hard currency• Deals issued in 28 currencies• Top 3 currencies: USD, EUR, and AUD

Sustainable affordable
housing in Japan
Japan was a source ofsustainable affordable
housing bonds to the tuneof USD7.1bn in 2022, issued
mainly by GLP-J REIT (realestate investment trust), the Development
Bank of Japan, and Toyota Motor Corp.
The bonds combine affordable housing
UoP with other sustainable purposes,
such as employment, social resilience,education, healthcare, and equality. Japan’sderegulated housing policy has ensured a
supply/demand balance and kept price rises
to a minimum, and similar to those of thelast decade.8

Several policies covered in the 101 Policies
paper refer to green finance but in manycases could also be applied to S&S or otherthematic issuance.

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

13

Supranationals issued
most sustainability volume

Latin America not far behind more developed regions in 2022
50

Issuers from seven regions priced sustainability
bonds in 2022. In January, the first Middle Easternissuer, Saudi National Bank, came to the market
with its debut sustainability Sukuk, a USD750m
deal maturing in 2027. Its UoP was earmarked forrenewable energy projects, the management ofliving natural resources, and land use.

Just Transition supports
sustainability issuance

30

20

USD Billions

Supranational issuers topped regional rankings with
USD52.3bn, followed by Europe and Asia-Pacific,
which contributed USD33.6bn and USD32.6bn
respectively. Issuance under the sustainability
theme in Africa amounted to just USD134m, a
90% YOY decline. Latin America and the Caribbean(LAC), on the other hand, reported a slight increaseof 5% YOY, to USD16.4bn. Sustainability bonds
originating from the LAC region in 2022 were priced
in five currencies: USD, MXN, JPY, CLP, and BRL.
The development of local currency markets is
critical to unlocking pension fund investment.

40

IBRD, the financing arm of the World Bank, retained
the tag of the largest development bank issuer in
2022 with total issuance of USD30.7bn.

0AfricaMiddleEast

Latin
America

North
America

AsiaPacific

EuropeSNAT

Source: Climate Bonds Initiative 2022

Development banks dominated sustainability bond issuance in 2022
60

The social component of sustainability bonds
makes them an ideal instrument for the public
sector where the focus is rightly on the Just
Transition. In 2022, development banks made thelargest contribution to the sustainability themewith USD58.9bn, followed by financial corporates
and non-financial corporates with USD34.7bn
and USD22.3bn respectively.

40

20
USD Billions

Sovereign issuers continued to be prolific,
contributing USD20.1bn, up from 2021 levels(USD16.6bn). Chile contributed USD5bn, withthree USD deals and one CLP, the largest among
the sovereigns.

100Development Financial Non-Financial Sovereign GovernmentLocal
Bank
Corporate
Corporate
Government
BackedEntitySource: Climate Bonds Initiative 2022

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

14

SOCIAL
Introduction• At USD130.2bn,
the social theme
contributed 15% of
GSS+ volumes in 2022.
• Issuance declined by 41% YOY, the mostdramatic drop among all themes as issuanceto support the ramifications of the COVID-19
pandemic tailed off.
• CADES was the largest issuer of social bonds,
with USD50.6bn or 39% and UoP supporting
France’s comprehensive social security system.
The magnitude of CADES’ presence in thesocial bond market impacted Europe’s position
as the largest region, France as the top country
source, and EUR as the preferred currency.

Europe led social issuance in 2022
Latin America
2.4bn

Africa 0.3bn

TOP 3 REGIONS
1. Europe USD72.9bn (56%)
2. Supernational USD18.3bn (14%)
3. North America USD8.4bn (6%)

Asia-Pacific17.8bnTOP 3 COUNTRIES
1. France USD54.5bn (42%)
2. Supranational USD18.5bn (14%)
3. USA USD18.4bn (14%)

Supranational
29.1bnEurope72.9bnNorth
America
18.4bnSocial issuers preferenced EUR
Hard currencies comprised 90% of the social
volume in 2022. The top two currencies were
responsible for 82% of the volumes. EUR dominatedwith volumes of USD63.2bn (49%), again, given
the domicile of CADES, the largest issuer. USD
supported USD43.4bn (33%) of issuance.

TOP 3 ISSUERS (VOLUME)
1. Caisse d’Amortissement de la Dette
Sociale (CADES) USD50.6bn
2. European Union USD9.3bn
3. Asian Development Bank USD4.3bn

Source: Climate Bonds Initiative

Europe ruled social
Europe was the dominant region withsocial-themed volumes of USD72.9bn (56%),
reflecting the origin of CADES, the largest
issuer in the space. This was followed by North
America, Supranational, and Asia-Pacific,
each representing 14% of the market. Just
seven social bonds have originated fromAfrica, including three in 2022. Mauritiusbased consumer lending company BayportManagement issued the largest 2022 social
bond in the region, worth USD250m. The USDdenominated deal, maturing in May 2025, waspriced together with a subordinated USD50m
clip, maturing in November 2025. The UoP ofboth deals was earmarked for socioeconomic
advancement and empowerment ofunderserved populations in EM, particularly
low-income countries including Ghana,
Mozambique, Tanzania, Uganda, Zambia,
Botswana, Colombia and Mexico.

The 2022 social bondmarket in numbers

Top 10 currencies in 2022

The 2022 social bondmarket in numbers

MXN 1.2bn
HKD 1.1bn
CAD 1.0bn
Others 2.8bn

NZD 1.8bn
AUD 2.5bn
GBP 3bn

TOP 3 ISSUERS (DEAL COUNT)
1. Minnesota Housing Finance Agency
221 deals (USD800m)
2. Colorado Housing and Finance
Authority 103 deals (USD300m)

JPY
3.7bn
KRW
6.4bn

3. Illinois Housing Development
Authority 102 deals (USD700m)

EUR
63.2bnTOP 3 CURRENCIES
1. EUR USD63.2bn (49%)
2. USD USD43.4bn (33%)
3. KRW USD6.4bn (5%)

USD
43.4bnSource: Climate Bonds Initiative

Cumulative regional social bond issuance since 2006
RegionGreen bondmarkets

Issuers

Amount issued(USDbn)Africa3

3659m

Asia-Pacific

10

515

134.1bn

Europe1888287.7bn

Supranationals-

13

160.5bn

Latin America

933

21.1bn

North America

2120

56.6bnSustainable Debt Global State of the Market 2022 Climate Bonds Initiative

Change2021-2022

15

41% of social volumes originated from France
50

France was the largest source of social bonds in
2022, with participation from 24 issuers. CADES
made the largest contribution of USD50.6bn
with UoP earmarked for French social security.
Supranationals ranked second followed by the USA
and South Korea. The USA was the most diverse,with 64 issuers, mostly municipals.

40

30

Hong Kong SAR and Tanzania recorded their firstever social bonds. The Hong Kong Mortgage Corp.
priced a USD1.4bn deal split between an HKD 2024
maturity, and a CNY bond maturing in 2025.

Government-backed entities
drive social volume
Government-backed entities topped 2022
rankings by issuer type with USD77.7bn, still
experiencing a sharp drop (47%) YOY. In the local
government category, 59 entities priced a totalof USD15.2bn in 2022. This category of issuer
included lots of US municipals (munis), many ofwhich priced multi-tranche deals. Five issuers
priced a single deal, the rest priced more, ranging
from two (State of New York Mortgage Agency
and City of Dallas Housing Finance Corporation)
to 221 (Minnesota Housing Finance Agency). The
US muni market is popular with retail (individual)
investors because of the tax advantages, and therelatability. These instruments provide a very
effective way of introducing another source ofinvestment into the thematic debt markets. No
sovereigns priced social deals in 2022.

ex
ic
o
M

n
Sp
ai

Ja

la
er

UK

pa
n

s
nd

y
an
rm

Ne
th

Ge

Ko
re
a

ut

h

US
A

Fr
an

ce
pr
an
at
io
na
l

USD Billions

0

Source: Climate Bonds Initiative

Government-backed entities priced most of the social volume
Amount issued

Issuer count

80

2400

60

1800

40

1200

20

600

0

0
GovernmentBacked Entity

Financial
Corporate

Number of issuers

South Korea led social bond issuance in
the Asia-Pacific market with USD11.5bn(65%). Climate Bonds recorded 17 social
bond issuers from South Korea in 2022.
Korea Housing Finance Corp (KHFC) was thelargest of those, pricing ten deals in CHF,
EUR, KRW and USD with combined volumesof USD3.3bn.

10

SuFrance dominated social-themed issuancevolume in 2022, with USD54.5bn or 42% of
the total.

USD Billions

Tanzanian NMB Bank issued a 2025 bond in
March 2022. The TZS25bn (USD10m) deal had
a framework which adhered to ICMA’s Social
Bond Principles (SBP), with eligible project
categories stated as access to essential services,
employment generation, socioeconomic
empowerment, gender inclusion, and foodsecurity and sustainable food systems.

20

So

CADES boosted France’ssocial presence

Local
Development Non-Financial
Government
Bank
Corporate

Largest social bond issuers in each issuer type, 2022
Issuer type

IssuerDevelopment bank

Asian Development Bank

4.3

Financial corporate

Citigroup Inc

3.1

Government-backed entity

CADES

50.6

Local government

The Commonwealthof Massachusetts

2.7

Non-financial corporate

Vonovia SE

2.6

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

USDbn

16

6. Sustainability-linked bonds

It should be noted that comparing
market volumes of SLB debt with other
UoP thematic debt is not relevant per se,
because SLBs are mostly general-purpose
financing, with unspecified UoP. At present,
issuers without specific projects, assets, or
expenditures can issue SLBs if they havesustainability targets in place, irrespective ofthe quality of those targets.
The forthcoming CBS v4 will offer nonfinancial corporate entities the opportunity
to obtain Climate Bonds Certification for
SLBs. This level of integrity will reassure
investors of the credibility of the targets
and ambitions.

SLB issuance declined
32% YOY in 2022, while
deal count dipped
20%. Prevailing market
conditions coupledwith increased scrutinyof SLB structures havecontributed to this decline. During the year,
SLBs maintained 0.4% share of total bondmarket issuance but the segment matured, withnovel and innovative public sector issuance,
diversification in regional issuance, andcentralisation around GHG target use.

Amount issued

Issuer count

120

240

90

180

60

120

30

60

0

0
2018

2019

2020

2021

Number of issuers

However, issuers and investors should be
mindful of common pitfalls around issuing
credible SLBs: they need to have credible
SPTs, be calibrated in line with 1.5-degree
pathways, and provide meaningful financial
mechanisms and bond structures that holdissuers accountable to their targets.

SLB volumes reached USD76.4bn in 2022

USD Billions

SLBs are forward-looking,performance-based debt instrumentswith progress towards entity-level KPIs (e.g.,
GHG emission reductions) measured by
SPTs (e.g., the target reduction by a specificdate). Used credibly and ambitiously,
SLBs can be a powerful transition financeinstrument for issuers to demonstrate
to investors their commitment to theirtransition plans.

2022
Source: Climate Bonds Initiative

between 2024 and 2040. The second-largest
non-financial corporate issuer was Dutch telecom
VodafoneZiggo, with USD2.4bn across two
deals, one USD and one EUR. VodafoneZiggo
is the largest issuer to tie all three scopes ofemissions to its SLBs, targeting a 50% reduction
across all three by 2025.
Financial corporates maintained their share of
the SLB market. The largest deal from this issuer
type was a EUR1.5bn (USD1.7bn) from private
equity fund EQT AB. Investment conglomerate
JAB Holdings had the most ambitious targets
with a USD500m and a EUR500m (USD525.9m)
SLB tied to reducing scope 1 and 2 GHG
emissions by 46.2% by 2030, increasing the
SBTi-validated share of its portfolio to 80% by
2025 and 95% by 2030, and 100% female board
representation in portfolio companies by 2025.

Sovereigns and local
governments joined the SLB
market in 2022

The most exciting development in 2022,
however, was the arrival of sovereign and localgovernment issuers to the SLB market. This
began with an SEK500m (USD55m) SLB from
Swedish City of Helsingborg with a target to
reduce its emission footprint by 61% by 2024
(against a 1990 baseline). This was joined by
Arizona Industrial Development Authority(USD200m) and Japanese Shiga Prefecture(JPY5bn, USD38.4m), with the former attached
to targets for a local forest resilience businessthe bond financed, and the latter with a 50%
reduction in GHG emissions by 2030.

Non-financial corporates continued to dominate
SLB issuance, making up some 82% of 2022
volumes as issuers choose to demonstrate theircommitment to transition through this structure.
The largest SLB non-financial corporate andoverall issuer continued to be Enel, printing
USD11.6bn worth of debt across 13 deals, allof which were tied to GHG scope 1 targets

Sovereign SLBs launched to much fanfare
in 2022 with two deals, one from Chile and one
from Uruguay. Both were benchmark-sized SLBs
worth USD2bn and USD1.5bn respectively. With
both tying their debt to GHG reduction targets
as well as against relevant secondary KPIs andtargets, a strong precedent has been set for future
sovereign SLB deals to serve as transition finance

Sustainable Debt Global State of the Market 2022 Climate Bonds InitiativeNon-financials dominate
Sovereign 6%
Development Bank <1%
Financial Corporate 6%
Local Government<1%
GovernmentBacked Entity
11%

Non-Financial Corporate
78%
Source: Climate Bonds Initiative

instruments. In addition, the use of the stepdown mechanism alongside the step-up provides
a powerful example for sovereign issuers to havea financial incentive to overachieve on their GHG
reduction targets (see page 25).

17

China ranked fourth in volumes but first in both
deal and issuer count (48 and 28 respectively),with an average size of CNY1.3bn (USD195.2m)
and and just one benchmark-sized deal in 2022
from China Construction Bank Corp worth
CNY10tn (USD1.5bn), utilising the Green UoP and
SLB format, tied to a target about the balanceof green loans to gross loans. China Gezhouba
Group Corp was the largest and most frequentissuer, with CNY6bn (USD860m) tied to energy
consumption intensity targets.

0%
2019
EUR

USD

2020
CNY

2021

JPY

CAD

GBP

Note: ‘Others’ includes 15 currencies, of which CHF, COP, and NZD saw their first SLBs in 2022.

2022
Others
Source: Climate Bonds Initiative

Italy and France remain the largest sources of SLB volume;
Chinese most frequent issuer
Deal count

60

15

0

0

na

Ca

Ja

s

er

la

nd

an
Ne
th

rm

in

Ge

Br
az
il
Ot
he
rs

5

da

30

pa
n

10

y

45

a

15

Number of deals

Amount issued

20

Ch

In 2022, Italy and France retained their 2021 titlesof largest and second-largest issuer countries
by volume, with Enel alone making up some
86% of Italy’s SLB debt in the year, having issued
USD12.6bn cumulatively. Supermarket chain
Carrefour was the largest French issuer, with
EUR2bn (USD2.1bn) of SLB issuance in 2022.

20%

US
A

Geographical contribution

40%

ce

The share of hard vs. soft currency issuance
continued tilting towards the latter, withsome 17% of SLB issuance coming in soft
currencies in 2022. This was supported by thegrowth of local currency deals, with 70% of issuancedenominated in issuers’ home currencies.

60%

ly

CNY and JPY were the fastest-growing currencies
for SLBs in 2022, with the share of eachsupported by regulator- or government-led
transition finance programmes. The single-largest
issuer of CNY-denominated SLBs was China
Construction Bank Corp, which priced a hybrid
CNY10bn (USD1.5bn) green and sustainabilitylinked bond. This meant that not only were there
UoP restrictions on the capital raised, but the
coupon rate is exposed to a 25bps step-up if theissuer fails to meet the targeted 11.5% proportionof green loans to non-green loans by 2024.
Hybrid green-SLB bonds like this are assessed by
Climate Bonds against both the GBDB and theSLB Database methodologies.

80%

Fr
an

USD remained the currency of choice for issuers
choosing foreign currency, however, with the
majority (66%) of USD issuance coming fromthose based outside the USA. Most of this camefrom DM issuers, with 41% from EM.

100%

Ita

EUR-denominated SLBs continued to lead in
2022, reaching 39% of volumes. This included
issuers based outside of the eurozone tapping
into the currency to attract the attention of
EUR-focused sustainable investors, with such
issuers comprising 17% of the amount raised
through SLBs.

EUR share of the SLB market is diminishing

USD Billions

CNY and JPY eat into EUR’s
dominance

Source: Climate Bonds Initiative

Higher share of small SLBs in 2022
100%
80%
60%
40%
20%
0%
2019
0-100m100-500m

2020
500m-1bn

2021

2022

1bn or more
Source: Climate Bonds Initiative

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

18

SLBs were shorter-dated andsmaller in 2022
The share of benchmark-sized deals fell to 30%,
down from around 40% in 2021. This reflects thegrowing share of deals originating from AsiaPacific, which tends towards smaller, shorterdated deal sizes. Asian issuers had the largest
share of both the sub-USD100m and USD100mUSD500m categories, with 53% of each category.
Meanwhile, European issuers had the largest shareof benchmark deals (67%), followed by North
American issuers (19%).
Deals with a tenor of 10+ years shrunk in 2022
to 30%, from 36% in 2021. Deals with a maturityof less than five years grew, making up 20% of
the volume, while tenors of 5-10 years remained
the most popular choice, representing 48% of
SLB debt. As with deal size, this was driven byincreased issuance in Asia-Pacific, with 74.5%
of debt from the region having a tenor of lessthan 10 years. North America had almost the
opposite split, with 53% of its debt having atenor of 10 years or above. Notably, 2022 saw 11
perpetual deals worth USD2bn, all from Chinese
issuers, with the largest coming from China
Railway Construction Corp who issued a dualtranche CNY3bn (USD443.8m) SLB tied to energy
consumption targets and a 10bps step-up oneach tranche.

Shorter-dated paper prevailed in 2022, but longer-dated increased share
100%
80%
60%
40%
20%
0%
2019
<5 years

5-10 years

10-20 years

2021
20+ years

2022
Perpetual
Source: Climate Bonds Initiative

GHG targets are the KPI of choice for issuers; most include at least
two scopes of emissions
ESG Score 5%
Waste 5%
Water 3%
Others13%

GHG targets are the KPI of
choice for issuers; mostinclude at least two scopes ofemissions
GHG emission targets continued to be the mostpopular KPI choice in 2022, with more than halfof issuers including some kind of decarbonisation
target. Renewable energy and energy efficiency
targets were the next most popular, with 13.5%of deals linked to driving down energy-related
emissions. Some USD4.8bn of debt was tied
to undisclosed KPIs and targets, which lacktransparency and accountability, and 5% to ESG
score performance, which is less material to theclimate transition.

2020

All 3 scopes
22%

Only
1 Scope33%

GHG
Emissions54.5%
2 Scopes
44%

Renewable Energy 8%
Undisclosed 6%
Energy Efficiency 6%

Source: Climate Bonds Sustainability-Linked Bond Database

Among SLBs with emission targets, roughly
67% covered all direct emissions of issuers,
demonstrating their commitments and ongoingtransition activities to decarbonise within theirown operations and energy sources. However,
the materiality of all three scopes varies bysector. For some sectors most of the emission
footprint is accounted within scope 1 and 2, likecement, steel, and transport services. For othersectors the footprint mostly comes from scope 3,
including oil and gas, agri-food, or finance. These
sectors must drive upstream and/or downstream
decarbonisation through supply chain engagement,
diversifying investments to low-carbon business,and decarbonising transport networks.

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

19

SLB targets need to cover all material emission sources
Most cement emissions come from raw mill
grinding, up until blending/grinding thematerial onsite. Accordingly, some 98% of
cement SLB issuance includes scope 1 GHG
targets, with companies like Holcim, GCC
SAB, and Huaxin Cement selling such bonds
in 2022.
Scope 3 emissions dominate for oil & gas(O&G) issuers, either from the purchase ofoil and other products upstream, or the
combustion of their products downstream.
While 84% of O&G SLB issuance has notincluded scope 3 targets, issuers Hera andRepsol included scope 3 targets in their 2021
deals. Unfortunately, none of the USD5.4bn of
SLBs priced by O&G issuers in 2022 included
scope 3 targets.
Climate Bonds invites issuers to include material
and ambitious emission targets, demonstrating
to investors the commitment to their transition
plan and speed of their decarbonisation journey.
This is particularly pertinent for hard-to-abate
sectors, given the scale of their challenge andthe contribution required from them for the
global climate transition.

Number of scopes in SLBs, by sector

Scope 1, 2, and 3 emissions by sector

100%

100%

80%

80%

60%

60%

40%

40%

20%

20%

0%

0%
CementOil & Gas

All 3 scopes

2 scopes

1 Scope

No GHG KPI

Source: Climate Bonds Sustainability-Linked Bond Database

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

CementScope 3

Oil & Gas

Scope 2

Scope 1

Source: CDP Technical Note1120

7. Transition bonds

While issuance volumesof transition bonds grew amodest 5% to USD3.5bn,
the deal and issuer countsurged in 2022, driven by
a diverse range of Chineseand Japanese heavy
industry issuers coming to the market to raise
funds under their respective national transition
finance programmes. The number of deals grewfrom 12 in 2020 and 2021 to 35 in 2022, while thenumber of issuers rose from seven and nine in2020 and 2021 respectively, to 25 in 2022.

2022 transition issuance driven
by heavy industry players
Transition bond deals came almost exclusively
from heavy industry players in China and Japan,
with those operating in the utility, oil and gas,and steel sectors dominating issuance volumes
with a combined 76%. In Japan the largest deals
came from Kyushu Electric Power Co and Tokyo
Gas Co, with JPY55bn (USD429m) and JPY39.8bn(USD323.3m) raised respectively. The largest
Chinese deal came from utility company HuadianPower International Corp, which raised CNY1.5bn(USD214m) in September. The only issuersoutside China or Japan this year were EBRD andSnam SpA, both repeat transition bond issuers,
raising SEK1.9bn (USD209m) and EUR300m(USD317.6m) in one deal each.

China and Japan receive transition bond policy boost
4
UnitedKingdom3

United ArabEmirates

Chemicals 1%
Financials 6%
Industrials 6%

SNAT
6%

Utilities
32%

Oil & Gas
28%

Singapore

Japan

Japan
Italy

1

United States

Supranational

0

Hong Kong

2018

Italy

Italy

France

2019

China

Hong Kong

FranceHong Kong
Brazil

China

2020

2021

2022
Source: Climate Bonds Initiative

Analysis of two transition deals priced in 2022
IssuerDeal

Motivation fortransition label

Five Hallmarks alignment

Daido
Steel Co.

Amountissued:
JPY27bn(USD191.7m)

UoP includes financing
for various green
projects, as well as
projects labelled astransition including
electric-arc furnaces,
casting and rolling
equipment energyefficiency measures,amongst others.

Hallmark 1: Daido has mid- and long-term
scope 1 and 2 emission reduction targets,in line with Climate Bond’s Steel pathway.

Coupon:0.529%
Maturity:
2032

Some of these measureswould be consideredineligible by Climate
Bonds, such as financing
for converting energy
sources to fossil gas.

76% from utilities, O&G and steel
Airlines 2%
Metals & Mining 4%

TurkeySupranational

Supranational

2

USD Billions

Issuance and issuer countrise as Chinese and Japanesetransition finance programmes
take off

PangangGroup
Co.

Amountissued:
CNY200m(USD30m)
Coupon:3.33%
Maturity:
2025

Steel
15%

Source: Climate Bonds Initiative

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

Hallmark 2: Daido has identified key
assets and activities for decarbonisation,
as well as an investment plan andgovernance mechanisms to drive thetransition.
Hallmark 3: Daido reduced its emissions
4% between 2013 and 2021 but plans analmost 35% reduction between 2021 and2025.
Hallmark 4 & 5: Daido has committed
to reporting on relevant KPIs and UoP,
internally and externally.

UoP includes financing
for a waste heat-toenergy power plant on
a steel manufacturingsite, and a centralised
control centre for thesame steel plant.

Hallmark 1: Pangang has yet to set GHG
targets of its own but has conducted scope
1 and 2 emission accounting. Its parent
company (AnSteel) has set emission
targets, aiming to peak in emissions by2025 and reduce emissions 35% against
peak by 2035.

The power plantcan be aligned with
Climate Bonds’
criteria based on its(undisclosed) emission
reduction potential,
but the centralised
control centre would
be considered out of
scope.

Hallmark 2: Pangang has identified somekey assets and activities for decarbonisation
but lacks a comprehensive transition plan.
However, it has allocated investment for
R&D related to decarbonisation, as well
as some governance mechanisms to drive
the transition.
Hallmark 3: Pangang has not disclosed its
emission reduction progress yet.
Hallmark 4 & 5: Pangang has committed
to reporting on relevant KPIs and UoP postissuance, internally and externally.

21

8. The Sovereign GSS+ Bond Club
Introduction
By the end of 2022, Climate Bonds had recorded
sovereign GSS+ deals with cumulative volumesof USD324.2bn from 43 countries, 25 of which
are repeat issuers. Three-quarters of the volume(USD240.6bn) originated from 17 DM countries
with the remainder (USD83.6bn) coming from 26
EM countries. The green theme was responsiblefor 81% of this (USD263.3bn), with social andsustainability taking 5% (USD18.3bn) and 12%(USD39.1bn) respectively and the final 1%(USD3.5bn) coming from SLBs, a new sovereign
theme in 2022.
Overall, sovereign GSS+ bonds captured by
Climate Bonds declined by 20% YOY. Volumes
were split between new bonds amounting
to USD51bn and taps worth USD48.3bn, andoriginated from 14 DM and nine EM countries.
The Sovereign GSS+ Bond Club continues
to expand its reach, welcoming eight new
members in 2022. These included DM issuers
like Canada and New Zealand, which issued
in their local currency; as a result, the shareof volumes issued in EUR dropped to 53%
compared to 71% in 2021.
As the source of nearly three-quarters (73%)
of cumulative volumes, Europe is the region
making the largest contribution to the Sovereign
GSS+ Bond Club. Demonstrating strong support
for climate and social issues, and a commitment
to develop relevant debt markets, sixteen
members of the EU27 have priced GSS+ bonds
to date, worth USD197bn. France remains thelargest single issuer by volume, and its green
liabilities had reached EUR52bn (USD58.8bn) by
the end of 2022.

Sovereign scorecard

Total market size (USDbn)

Sustainability

Social

SLB

Green
263.3

3.5

18.3

39.1

Number of issuers

28

2

2

16

Number of currencies

16

1

4

8

Market size (USDbn)

80.8

3.5

N/A

15.1

Number of issuers

17

2

0

5

Number of currencies

13

1

0

6

2022

EUR accounted for 53%
of 2022 issuance

Nearly 3/4 of cumulative
GSS+ sovereign volumes comefrom Europe

CAD 4%THB 3%HKD 3%

North America 1%

Latin
America
15%

Other
12%

GBP
12%

Africa 1%
AsiaPacific
10%

EUR
53%
USD
13%

EUR
73%

Source: Climate Bonds Initiative

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

Source: Climate Bonds Initiative

22

Sovereign Green Bonds
Theme

Green

SocialSustainability

SLB

MarketCountry

USDbn
as of 31/12/2022

Year of first
GSS+ bondRepeatissuerMembership of the Sovereign
Green Bond Club swells
Green
Reflecting the overall sovereign
GSS+ market composition, 81%(USD80.8bn) of the 2022 sovereign
volume was labelled green. Twelve countries
priced new green bonds, while existing deals
were tapped by ten. Six debut issuers all
originated from DM: Austria, Canada, Denmark,New Zealand, Singapore, and Switzerland,amounting to USD16.8bn. Among these, Austria
made the biggest contribution with a pair ofbonds worth EUR5bn (USD5.3bn). The largest
sovereign green issuer in 2022 was Germany,
pricing USD14.8bn split between a new five-year,
and multiple taps.

DM

Austria

5.3

2022

DM

Canada

4

2022

DM

Denmark

2.3

2022

DM

New Zealand

1.8

2022

DM

Singapore

1.8

2022

DM

Switzerland

1.1

2022

DM

Italy

24.4

2021

DM

Spain

9.3

2021

DM

UK

33.7

2021

DM

Germany

42.7

2020

DM

Hong Kong

9.8

2019

DM

Netherlands

17.3

2019

DM

Belgium

17.1

2018

DM

Ireland

7.8

2018

DM

France

58.8

2017

EM

Colombia

0.5

2021

EM

Serbia

1.2

2021

EM

Egypt

0.8

2020

EM

Ghana

0

2020

EM

Hungary

4.8

2020

EM

Chile

8.3

2019

Sustainability

EM

South Korea

1.3

2019

EM

Indonesia

6.1

2018

EM

Lithuania

0.1

2018

EM

Seychelles

0

2018

EM

Fiji

0

2017

EM

Nigeria

0.1

2017

EM

Poland

4.3

2016

EM

Guatemala

1.7

2020

EM

Chile

16.6

2019

DM

Isle of Man

0.8

2021

The sustainability label was applied
to 15% (USD15.1bn) of the sovereign
debt priced in 2022. The Philippines
was the only debut issuer in this space(addressed below) with repeat deals comingfrom Andorra, Chile, Mexico, and Thailand, which
also tapped an existing deal. Having priced twosustainability bonds in 2021, Chile was the largest
issuer in the 2022 sovereign space with three USD
deals and one CLP and combined volumes of
USD5bn. Overall, a greater share of sustainability
versus green sovereign issuance is from EM.

DM

Luxembourg

1.8

2020

EM

Philippines

2.3

2022

Sustainability-Linked Bonds

EM

Andorra

1.2

2021

EM

Benin

0.7

2021

EM

Latvia

0.7

2021

EM

Malaysia

0.8

2021

EM

Peru

4.4

2021

EM

Slovenia

1.4

2021

EM

Uzbekistan

0.2

2021

EM

Ecuador

0.4

2020

EM

Mexico

7.1

2020

EM

Thailand

7.7

2020

EM

Chile

8.5

2019

EM

South Korea

1.3

2019

EM

Chile

2.0

2022

EM

Uruguay

1.5

2022

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

SocialClimate Bonds did not record any
sovereign social bonds in 2022. The
immediate consequences of the
COVID-19 pandemic have been addressed, andthose earmarking expenditures to deal with therecovery or other social issues combined themwith environmental expenditures in 2022 (under
the sustainability theme).

SLBs emerged as a sovereign
instrument for the first time in2022 (addressed below). Chile and
Uruguay brought one deal each, with a combined
volume of USD3.5bn, contributing 4% to 2022
sovereign volumes.

23

Spotlight DM issuer: New Zealand
New Zealand isvulnerable tofloods, droughts,
and wildfires. The
government has an
Emissions Reduction
Plan and a National
Adaptation Plan in place and has committed
to achieving net zero long-life GHG emissions
by 2050. By 2022, 82% of the country’s
electricity generation was generated byrenewables, among the highest globally.12
The government published its green bondframework in August 2022 which statedits climate objectives as tackling climatechange, protecting, and restoring theenvironment and indigenous biodiversity,and building a more productive, sustainable,
and inclusive economy.13 The frameworkdescribed eight eligible categories of
expenditure: clean transport, energy
efficiency and renewable energy, green
buildings, living and natural resources andland use, terrestrial and aquatic biodiversity,
climate change adaptation, sustainable water
and wastewater management, and pollution
prevention and control.
In mid-November, New Zealand priced its
inaugural green bond via syndicate. Demand
for the NZD3bn (USD1.8bn) 2034 maturity
deal reached NZD7.5bn, covering the book
two and a half times. The Treasury remarked
that it saw participation from new names
as well as some investors who had notparticipated in its syndications for several
years. They were very pleased with thetransaction overall as well as the positive
response to the framework.

Spotlight EM issuer: The Philippines
The Philippinescomprises more than
7100 islands, and its
geographic locationmeans that it is
exposed to multiple
climate vulnerabilities.
These include frequent and increasingly
intense cyclones leading to flooding, rising
sea levels, and rising sea temperatures andoceanic acidification. Under its commitment
to the Paris Agreement, the Philippines ispursuing an ambitious target to cut GHG
emissions by 75% by 2030. The achievementof close to 73% of that relies heavily on DM
to provide climate finance, technologies, andcapacity development, with the remainder
coming from domestic resources. In addition
to its climate challenges, the COVID-19
pandemic hit the country hard, reversing
social developments and economic progress.
To address these issues, the Philippines
published its Sustainable Financing Frameworkin November 2021.14 The framework included
seven categories of social expenditures, andfour environmental: access to essential services,
affordable basic infrastructure, food security,
employment generation, socioeconomic
advancement and empowerment, affordable
housing, COVID-19 expenditures, cleantransportation, climate change adaptation,
management of biodiversity and land use, andrenewable energy.

The Philippines issued against this framework
three times in 2022.
March: Part of a USD2.25bn three-tranche
deal, the USD1bn 25-year sustainability clip
attracted the strongest demand, and achieved
spread compression of 50bps in primary,pricing with a small new issue premium.
April: The Philippines has sold Samurai
bonds annually since 2018 (except 2020) andbecame the second sovereign to price GSS+
debt in JPY (Hungary priced multiple green
JPY deals in 2020 and early 2022, and Mexico
became the third when it priced sustainability
deals in August 2022). The JPY70.1bn(USD553m) four-tranche deal was spreadover 2027, 2029, 2032, and 2042 maturities.
The two shorter tranches priced with aclear greenium, while the longer tranches
exceeded the length of the existing JPY yield
curve, hence the presence of a greenium
could not be determined by Climate Bonds.
October: A USD2bn deal included a USD750m
25-year sustainability tranche. Rising interest
rates in the US had discouraged issuers in the
Asian markets so investor interest was strong,
and the deal achieved book cover of five times,
allowing spread revision of 45bps. The deal
priced outside its yield curve but tightened in
the secondary market.
These efforts are expected to contribute tosustainable market creation in the country andattract private sector crowding in.

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

Three 2022 innovations from
GSS+ issuing nations
In 2022 three developments contributed to amore inclusive sovereign GSS+ debt market.
A variety of structures can cater to different
investment preferences and hence increase
investor participation. The SLB structure can
support a broad range of issuers and provide afurther source of capital for sustainable sovereignissuers to complement thematic issuance under
the UoP (GSS) format.

1. Short-dated paper: Austria
According to Bloomberg, the sovereign shortterm debt market, comprising instrumentswith a residual maturity of one year or less at
issuance, stood at USD14.5tn in mid-March
2023.15 Climate Bonds published A Discussion
Paper: Certification of Short-Term Debt
in June 2022, describing how whole entity
Certification could increase the variety and scopeof green instruments available to investors while
maintaining the integrity of the green label.16
Having published its Green Financing Frameworkin April 2022, Austria became the first country
to issue a green Treasury Bill when it priced a
EUR1bn (USD973.9m) 126-day maturity deal via
auction in October.17 The transaction attracted abid/cover ratio of 2.69 times, which is more thanthe 2.12 times average for other Austrian T-bills
priced in 2022. Investors describing themselves
as green comprised 85% of the book, mainly
central banks and money market funds. The
deal obtained a greenium of 2bps according to
the Austrian Treasury. The instrument was rolled
when it matured in February 2023.

2. Index-linked bonds: Hong Kong SAR
and France
Green index-linked bonds can offer protection
from rising inflation, while addressing investor
concerns over the green transition.
An established repeat issuer of sovereign green
bonds, Hong Kong SAR priced the first inflationlinked sovereign green bond in early May. The
HKD20bn (USD2.55bn) three-year green retailbond had a coupon linked to the Hong Kong
Consumer Price Index (HKCPI).
Later that month, France followed suit with a
EUR4bn (USD4.2bn) 2038 maturity deal with acoupon linked to the European Consumer Price
Index (ECPI).18 The deal was priced via syndicate
and attracted an order book of EUR27.5bn,
enabling price revision of 3bps. The bond priced
slightly outside the FRTR inflation-linked curve.
The order book included around 230 names,
and more than half of the bond was allocatedto green investors. The deal stood at EUR4.5bn(USD4.8bn) by the end of 2022 following a
September tap, at which point it was inside its
yield curve, thus achieving a pricing benefit.

24

3. Sustainability-linked bonds:
Chile and Uruguay
Sovereign SLBs encourage accountability,
linking the servicing cost of liabilities tothe achievement of national climate andenvironmental commitments. In November 2021,
the World Bank published Striking the Right
Note: Key Performance Indicators for Sovereign
Sustainability-Linked Bonds, which listed
appropriate KPIs for inclusion in sovereign SLBs.19
The Chilean Ministry of Finance referenced theWorld Bank’s suggested KPIs in its February 2022
SLB framework which complied with ICMA’s SLB
Principles.20 A month later, Chile priced the firstsovereign SLB. The USD2bn 2042 maturity deal
incorporated coupon step-ups of up to 25bps
total, arranged as follows:
1. Failure to cut GHG emissions by 15.4% by 2030
would incur a coupon step-up of 6.25bps.
2. Failure to reach peak emissions between
2020 and 2030 would incur a coupon step-up
of 6.25bps.
3. Failure to increase renewables installedcapacity by 60% by 2032 would incur a coupon
step-up of 12.5bps.
The deal achieved an order book 5.75 times
the deal size, and primary market spreadcompression was reported as 40bps. Climate
Bonds observed a normal new issue premium.
Investors describing themselves as green orsocially responsible were allocated 68% of
the deal, and the order book included a broad
range of international accounts, diversifying theinvestor base.

KPI commitments of Uruguay’s SLB

KPI 1.1

MetricSPT

SPTdeadline

GHG emission reduction-50% (NDC aligned)

31/12/2025

KPI 1.2
KPI 2.1

Forest conservation

KPI 2.2
Chile has suffered from over a decade of drought
and is acutely vulnerable to rising sea levels,
which have the potential to severely impact thecountry’s agricultural resources. However, theMinistry of Finance is firmly behind the efforts toaddress environmental and social challenges.
The nation is the only one to have issued green,social, sustainable, and sustainability-linked
bonds. These deals together accounted foralmost USD35.4bn, equivalent to 35% of Chile’s
outstanding liabilities.21
In October 2022, Uruguay issued its first
GSS+ bond, an SLB, with support from theInter-American Development Bank (IDB). The
USD1.5bn 2034 maturity deal had a uniquestructure incorporating both step-up penalties
and step-down rewards according to whether the
SPTs are exceeded by 2025.
This model could incentivise EM climate progressby reducing debt-servicing costs for those that
hit climate or nature-based goals. If Uruguay
overshot its GHG emission NDC (-3.2%/year) it
would save around USD33.7m in borrowing costs.
If both targets were achieved, the potential saving
would be around USD67.1m.

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

Couponchange+15bps-52%-15bps100%+15bps103%-15bpsThe deal attracted a reconciled order bookof 2.6 times the deal size, from 188 accounts
from the USA, Europe, Asia, Uruguay, and other
Latin American countries. Among these were 40
accounts participating in a Uruguay USD deal
for the first time, many with a sustainability
focus. This interest enabled spread compressionof 25bps, and the Ministry of Economics andFinance reported a greenium. The deal moved
further inside the curve in the secondary market.
The sovereign SLB market is at its infancy but is
expected to grow considerably. Work is needed tosupport this expansion in a credible and successful
way. A useful resource is the recently createdSustainability-Linked Sovereign Debt Hub.

The biggest issuers are yet
to comeClimate Bonds expects the total number ofsovereign GSS+ issuers to top 50 before the endof 2023. Bloomberg currently records sovereign
debt from 168 country issuers, hence there arestill plenty which have not come to the market,
including the three sovereign issuers with thelargest outstanding volumes: the USA, Japan,
and Mainland China.22

25

9. Building resilience through sustainable financeIntroduction
Climate Bonds researchsuggests that bonds with
UoP contributing to A&R
are already being financed
under various labels.
While green continues tobe the dominant theme,
the market remains largely focused on mitigation.
As mechanisms are developed to identify, label,
and therefore prioritise A&R investments, themarket is expected to grow rapidly. Climate
Bonds is launching a Global Resilience
Programme, which will include the developmentof a Climate Resilience Taxonomy to expand
the universe of investable opportunities andstrengthen investor support for the sector.
Climate change impacts are manifesting more
frequently and with greater intensity, and thewindow of opportunity to address them isshrinking. GSS+ bonds can channel capital
towards adapting human and ecological systems
and strengthening their capacity to cope withand recover from climate shocks.
Resilience is already being financed in
the GSS+ debt market. However, financial
instruments clearly designed and labelled tosupport resilient investments remain scarce.
A major barrier is the absence of a pipeline ofinvestible projects, because of a lack of clear,evidence-based definitions of what constitutes aresilience investment.
By providing the market with clear definitions
and rulesets, the current universe ofinvestments that can legitimately be financed
through GSS+ instruments can be expanded
to include those that build resilience. This
expansion will include not only investments that
reduce the direct physical impacts of climatechange (e.g., flood barriers, early warning
systems, etc.) but also investments that address
the underlying vulnerability of people andecosystems to climate change (e.g., healthcare,housing, gender equity, deforestation, etc.).

Climate Bonds is launching a Global Climate
Resilience Programme to drive market
ambition and facilitate the rapid mobilisationof global capital for investments in resilience ofphysical, social, ecological, and financial systems.
Climate Bonds has set out two goals forthe programme:
1. Catalyse USD1.5tn within the thematic bondmarket to be dedicated to resilience investments
by 2025;
2. Influence the public sector in key geographies
to put in place policy and regulatory measuresthat incentivise investments in and reduce thecost of capital for projects that enhance systemic
and transformative resilience.
Climate Bonds will achieve these goals throughsupporting: (i) the identification of credible,
science-based investment opportunities thatbuild resilience (including the development of a
Climate Resilience Taxonomy), (ii) mobilisationof finance towards credible resilience measures,and (iii) acceleration of growth of resilience
investments through a supportive policy andregulatory environment.

At the start of 2023, Climate Bonds started
the development of the Climate Resilience
Taxonomy. This will provide a common
framework for issuers, investors, market regulators,
observers, and policymakers to identify andprioritise expenditures, projects, assets, activities,
and entities that make meaningful contributions
towards climate resilience.
The Resilience Taxonomy will becomprehensive, holistic, and inclusive,reflecting the fact that climate resiliencecuts across all sectors and activities. This
breadth will create opportunities and promote
innovation in areas where resilience needs andinvestment opportunities are substantial but
often overlooked, such as healthcare, social
protection, and natural capital, among others.

Limitations and scope of the analysis
The methodological approach for this research
consists of data analysis of GSS+ bonds
recorded in Climate Bonds’ three databases:
1. GBDB
2. SSBDB
3. SLB and Transition Bond Database
The research criteria applied to map GSS+
bonds with A&R UoP are primarily adaptedfrom the framing paper on Green Bonds
for Climate Resilience prepared by Climate
Bonds for the Global Center on Adaptation incooperation with the EBRD, and include:27• A keyword search of A&R terms in the UoP
description (see Appendix 2 for a list of
screening keywords);• Value-returning standalone A&R-related UoP(‘unspecified A&R’);28• Manual addition of SLBs tied to resilience KPIs.
Eligibility of UoP categories is determinedbased on information made public throughan issuance’s framework, final terms, orprospectus. The total capital flows towards
climate resilience are difficult to map
accurately because issuers do not commonly

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

report the specific allocation of proceeds todifferent project categories.
If public disclosure of the UoP is inadequate,
or not explicitly defined as adaptation orresilience, bonds can be missed from thescreening process. Moreover, Climate Bonds’
databases do not track post-issuance proceeds
allocations but record flat allocations (i.e.,equal amounts in each category), unlessrelevant data is made available when the
instrument is issued. Lastly, since resilience
investments can be allocated to broader UoP
categories (e.g., Water), an indication of thesize of such flows is not currently provided
by Climate Bonds databases, so allocation
volumes were not included.
Therefore, the results of this mapping are
estimates and do not reflect the actual capital
flows being directed to A&R investments
through GSS+ bond instruments. Disclosureand tagging practices must evolve before
Climate Bonds can accurately capture andtrack A&R-related finance in the global
thematic debt market.

26

Mapping the A&R
GSS+ universe

GSS+ bonds for climate resilience: Scorecard

Market highlights• Of the 33,849 GSS+ debt instruments recorded
by Climate Bonds at the end of 2022, 6,494(19%) were identified as having some degree ofresilience-related UoP. In 2022, the share was
13% (949).
• Across the global thematic debt market, 845
issuers priced instruments with a resilience
component (23%). The number of issuers in
2022 was 277.
• Just under two-thirds of 2022 GSS+ bonds
with resilience UoP originated from DM, while
26% came from EM and 11% was issued by
SNAT entities. The majority originated in North
America, which contributed 41% to the total,
with virtually the whole volume originatingfrom the United States (96%). Asia-Pacific was
the second most prolific region (26%), with 244
bonds issued in 2022 bringing its cumulative
total to 883. Europe followed closely, with 21%of the market share and 195 bonds.
• Historically, thematic issuance withresilience UoP has been dominated by
local governments. Of the 145 different
local governments that issued resilience
GSS+ debt since 2012, a large portion were
US municipalities or state authorities (39%of cumulative bonds). In 2022, the private
sector was particularly prolific, with financial
corporate and non-financial corporate issuers
together representing 35% of the total.
Indiana Finance Authority made the largest
contribution (32 bonds or 3% of the total).
With respect to corporate issuers, Standard
Chartered Bank placed first by number ofbonds, with 22 or 2% of the market.
• The latest mapping confirmed the findings ofa prior analysis conducted by Climate Bonds.23
First, resilience does not feature prominently
in GSS+ deals despite the existence of mature
and well-established markets like that of green
bonds, which are currently serving low-carbon
rather than climate-resilient investment.
Second, there is a hidden market for resilience
which is not being labelled and is difficult tomap due to the complexities of data collection
and interpretation.
• Resilience-related UoP goes beyond
climate-centric activities. Thematic bonds
can also serve social resilience, which is an
essential need for communities, entities, andcountries in the context of post-pandemic life,
geopolitical instability, rising energy costs andsoaring housing prices. An area of the market
to watch is the sustainability label. Due to theirhybrid nature, sustainability bonds combine
UoP to address green and societal needs,
presenting potential for a resilient approach.

Green

Sustainability

SocialSLB

Transition

Number of
instruments

3988

1309

1195

2

N/A.

Numberof issuers

415

282

186

1

N/A

Numberof countries

44

34

20

1

N/A.

Number ofcurrencies

25

22

17

1

N/A.

Green bonds for climate resilience: Scorecard
2022

2021

Change YOY

Number of instruments

507

676

-25%

Number of issuers

137

160

-14%

Number of countries

25

29

-14%

Number of currencies

13

18

-28%

A peek into A&R issuancein 2022
1. New Zealand’ssovereign green bondAmount: NZD3bn/USD1.8bn
Maturity: 2034
Eligible UoP categories (GBP): (i) Clean
transport; (ii) Energy efficiency & renewableenergy; (iii) Green buildings; (iv) Living and natural
resources and land use; (v) Terrestrial & aquatic
biodiversity; (vi) Climate change adaptation; (vii)
Sustainable water & wastewater management;(viii) Pollution prevention and control.
Eligible projects under New Zealand’s inaugural
green sovereign bond are expected to facilitate
the country’s transition to a low-carbon
economy and contribute to the government’s
climate-related, biodiversity conservation andenvironmental goals.
Under the climate change adaptation category,
the government has the three-fold objective of(i) reducing the physical climate vulnerabilityof the country’s infrastructure, (ii) helping
regional communities and Māori to make betterrisk-informed decisions to prepare for andrespond to climate change and climate-related
disasters, and (iii) supporting other countries
to enhance their resilience to climate change.24
Projects range between local flood protection,
mitigation and control schemes, solutions totackle water scarcity and avert water-related

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

emergencies, building systemic resilience such as
via monitoring and warning systems, and climate
projection data tools and climate adaptation
information portals to reach at-risk communities
in a timely manner and allow for anticipatory andrisk-informed action.
While the framework has a standalone UoP
category for A&R-related expenditures, manyother relevant projects fall under broader sectorsthat are well-established in the green bondmarket. For example, water storage, irrigation
infrastructure and water assessment projects toimprove the resilience of New Zealand’s regions
to drought and water shortages are included
under the sustainable water & wastewater
management category. This indicates that thesize of capital flows towards resilience-related
investments might be greater than at first glance,
as many expenditures do not hold a specificresilience tag but are allocated to broader UoP
categories with resilience benefits.

2. Citigroup’s social bondAmount: USD2.5bn
Maturity: 2026
Eligible UoP categories(SBP): (i) Access to essential
services – Financing and financial services/financial inclusion; (ii) Affordable housing; (iii)
Affordable basic infrastructure; (iv) Access toessential services – healthcare; (v) Access toessential services – education; (vi) Access toessential services – smallholder farmer finance.

27

Citigroup’s social bond supports lending toinclusive businesses in EM. Proceeds were
earmarked to invest in raising productivityof small-farm agriculture, build resilience toclimate change, improve access to markets,and strengthen capacity. Projects include theprovision of agricultural inputs and credit,
expanding access to markets of agricultural
products, training and other extension services.25
These contribute to building resilient societies.

3. True Securitizadora (Oakberry)’ssustainability bondAmount: BRL50m/USD9.3m
Maturity: 2027
Eligible UoP categories(GBP and SBP):(i) Environmentally sustainable managementof living natural resources and land use,and Agriculture and forestry, i.e., activities
that reduce carbon loss or increase forest
stock (Climate Bonds); (ii) Food security andsustainable food systems, and Socioeconomic
advancement and empowerment.
Oakberry is a Brazilian food processing company
which produces healthy fast-food options
with Brazilian-sourced products. Projects
with intended resilience outcomes mainly fit
within the category of social A&R, i.e., creating
more robust social systems. The issuer aims
to use sustainability bonds for agriculture andsustainable production that support small
farmers and family farming in the riversidecommunity of the Amazon region where thecompany will purchase açaí. In addition tosustainable harvesting, the issuer aims topromote and invest in education infrastructure
and create access to other basic services
to guarantee the human rights of the local
population, including healthcare, clean andsafe water, access to financial services, and theinclusion of women in training and decisionmaking programmes.26
This bond is a good example of an innovative
securitised deal by a non-financial corporate in
the region, in a category where there are few.
Green and social UoP are complementary.

4. Arizona Industrial
Development Authority’s
SLB

In the last two decades, Arizona has experienced
multiple mass-scale catastrophic wildfires
caused by climate change-induced weather
systems, as well as the aforementioned forest
mismanagement.

Amount: USD112.9m,
USD86.8m (two tranches)

NewLife has been contracted by the US Forest
Service to mechanically thin the forests toremove dangerous levels of undergrowth,
making them more resilient against naturally
occurring fire regimes, and in turn, generating
low-grade wood fibre and biomass to be used forcommercial production.

Maturity: 2028, 2047
The Arizona Industrial Development Authority
issued the first ever US municipality (muni)
SLB in February 2022, in the form of a revenue
bond for a local company called NewLife Forest
Restoration LLC. The full proceeds of the bondare loaned to the relevant company, with the
expectation that the ensuing revenue generated
will finance the redemption for the bond.

The underlying loan from this SLB will
help NewLife continue the delivery of its
manufacturing solution, helping it more
efficiently produce forest products. This is
expected to increase its margins, which will
help finance the less economical parts of its
operations, including its forest undergrowththinning operations.

The activities of NewLife pose an exciting
example of adaptation finance through SLBs.
The company’s business model is in responseto the catastrophic wildfires in Arizona, in largepart caused by small-scale, natural wildfires(which are often good for the eco-system) being
extinguished by local communities, which view
them as a threat to their livelihoods.
The unfortunate consequence of this practice is thatthe undergrowth in these forests then over-grows,
creating a dangerous fuel for devastating forest
fires. Abundance of undergrowth is conducive tocrown fires through a phenomenon known as theladder effect, making large-scale forest fires evenmore difficult and dangerous to control.

The two KPIs used for this SLB tie the interest
rate of the bond to the successful achievementsof NewLife in its main business operation: therestoration of forestland and the use of related
products in its commercial operations. If NewLife
fails to achieve both targets, a step-up of 150bps(100bps for KPI1, 50bps for KPI2) would beapplied to the existing 9% and 11% respective
coupon rates.

Arizona Industrial Development Authority / NewLife Forest Restoration
KPIs and SPTs
Key Performance
Indicator (KPI) 1
Sustainability
Performance Target(SPT) 1

Forestland restored

Measured # of acres
restored

36,000 acres

Observation date

KPI 2

% of logs processed
as restoration logs

SPT 2

80%

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative

31 December 2024

Measured in %Observation date

31 December 202428

10. Outlook
Climate Bonds recorded
GSS+ deals worth a combined
USD858.5bn in 2022, bringing
the cumulative total to
USD3.7tn. The developmentof the thematic debt market
continued, with new issuers joining, instrument
innovation, and regulation in multiple regions
gathering pace. While GSS+ volumes dropped
YOY for the first time in a decade, its 5%
contribution to global bond market issuance
was maintained. Green bonds were responsible
for over half (57%) of the new volumes with
USD487.1bn being added to the market, social
bond issuance reached USD130.2bn (15%),
sustainability USD161.3bn (19%), SLBs saw
USD76.4bn (9%), and USD3.5bn was issued
under the transition label (0.4%), the only one toexperience growth on the year.
The thematic debt market has persistently
suffered from a lack of supply. The push andpull of the supply and demand dynamic wasfelt even more acutely in 2022, as sentiment
and, in some regions, regulation tilted investors
towards sustainable investments, while lenders
were anxious to tap the market at the rightpoint given rising rates and the challenging
macroeconomic landscape.
Looking ahead to 2023, Climate Bonds expects fivedevelopments to push the GSS+ market forward:

1. Resilience deals cancontribute to annual
USD5tn by 2025
Cumulative green bondissuance reached USD2.2tn by
the end of 2022, but Climate
Bonds is pushing for at least USD5tn in annual
issuance by 2025.
The persistent lack of supply has been a key
obstacle to reaching this target. There is atremendous opportunity to tap unmet demandby scaling-up capital flows towards investments
in resilience. By providing the market with clear
rules and definitions, the current universe ofgreen investment can be expanded to include
those that build resilience.
This expansion will move beyond investmentsthat reduce direct physical impacts of extreme
weather and include those that address
the underlying vulnerability of people andecosystems to climate change.
Climate Bonds is committed to developing thismarket, as described in section 9 of this report.

2. Climate Bonds
Standard v4 will bringrigour to SLBs
SLBs emerged in 2018, andby the end of 2022, Climate
Bonds had recorded deals
with a cumulative volume of USD204bn.
The popularity of the instrument stems from theinnovative structure. Investors can contribute to real
impact on climate performance at the company
level, and issuers in all sectors can participate in
the thematic debt market and be rewarded fordelivering on their sustainability goals.
As with any nascent market, legitimate concerns
over the credibility of SLBs have been raised
due to varying ambition levels of the KPIs.
The expansion of the Climate Bonds Standard
and Certification Scheme to include SLBs
will address this issue. These efforts will offer
rigour, and signal to prospective investors andregulators the SLBs that meet best practiceagainst an internationally recognised standard.
Climate Bonds is expecting the first Climate
Bonds Certified SLB to appear later in 2023. This
will be a catalysing moment for SLB credibility,
enabling the market to contribute meaningfully
to the 2025 target of USD5tn in annual thematic
debt issuance.

3. Government support togreen industry grows
Subsidies, credit guarantees,
tax offsets or other financial
incentives will financediscoveries that enable therapid scaling up of climate change solutions,through the large, transparent deals thatinvestors in the GSS+ market are so keen to see
more of.
Climate forecasting group Inevitable Policy
Response (IPR) calculates the combined totalof public money now available in the US for
clean energy and climate investment via the
Inflation Reduction Act (IRA), Infrastructure andInvestment Jobs Act (IIJA) and the CHIPS &Science Act to be almost USD1tn.29
This is being supplemented by the Bipartisan
Infrastructure Laws (BILs), which will provide
tax cuts and grants for clean energy. The
BILs represent a government-enabled but
private sector-led tool to facilitate a new raft ofinvestment to green projects.

4. Tipping point fortransition finance
Climate Bonds expects that2023 will offer a crucial tipping
point for transition, greening
the hard-to-abate sectors
and aligning heavy industry with global efforts
towards net zero. The nascent transition bondmarket has trailed in volumes when comparedto other labels but there are signs of change as
it was the only segment of the thematic debt
market to chalk up a YOY increase in 2022.
The Japanese market, the largest source oftransition volumes in 2022, has been encouragedby the Ministry of Economy, Trade, and Industry(METI), which published Basic Guidelines on
Climate Transition Finance in May 2021.31
However, if other nations adopt similar frameworks
endorsing credible transition financing, the tipping
point could soon become a reality. Encouragingly,
the UK’s Financial Conduct Authority (FCA)
mandated a Transition Plan Taskforce (TPT) to
work on a gold-standard transition framework,
now open for public consultation.
The EU supporting transition finance witha framework of its own could facilitate theprinciples of the European Green Deal, whichcurrently loosely nods to transition amidst its
climate principles.
Meanwhile, Climate Bonds is developing its own
transition standards to help these efforts andinform future frameworks.32

5. Sovereigns must use
their power to wield
influence
Climate Bonds expects theSovereign GSS+ Bond Club toreach 50 members in 2023. Inlate 2021, Climate Bonds called for the number ofissuers to double from 20 to at least 40 nations.
By the end of 2022, that number was 43.
By committing to the GSS+ market, sovereigns
send a powerful signal of intent around climate
action and sustainable developments toregulators and the private sector. The activity of
issuing a sovereign deal can catalyse domestic
market development by unlocking additionalsources of investment and encouraging moreissuers to leverage the market to finance assets,
projects, and expenditures contributing to net
zero and a sustainable future.

Across the Atlantic, Europe is responding with
EU Commission President Ursula von derLeyen announcing the Green Deal Industrial Plan
at Davos, which includes the Net Zero Industry
Act.30 The aim is to increase the funding of clean
energy technologies.

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative29

Appendix 1: Examples of labels in each theme

Green

Sustainability

SocialSLB

Transition

Blue

ESG

Affordable housing

Sustainability-linked

Transition

ClimatePositive impact

Education

ESG-linked

Blue transition

Green

Sustainability

Equality

SDG-linked

Green transition

Green (carbon
neutrality)

Sustainability
awareness

GenderSocial impact-linked

Low-carbon transition

Renewable energy

SDG

Healthcare

Social- andsustainability-linked

Solar

Socially responsible
investing (SRI)

SDG housing

Environmental

Sustainable
development

Town revitalisation

Water

Green innovation

Youth

PACE

ImpactEmployment

Sustainability

ImpactSDG
Climate resilience
ImpactSustainable Debt Global State of the Market 2022 Climate Bonds Initiative30

Appendix 2: List of A&R keywords for screeningof Climate Bonds databases
Sector

Keywords/Terms

Sector

Keywords/Terms

Sector

Keywords/Terms

General A&R
terms

Adaptation
Resilience
AnR
A&R
Adaptive
Resilient
Climate risk
Exposure
Hardening
HazardClimate proofing
Vulnerability
Redundancy
Redundant
TCFD

EnergyDistributed Generation
Distributed PV
Microgrids
Minigrids
Energy Storage
Underground cabling
Structural Strengthening

Infrastructure
and built
environment

Agriculture,
forestry,land use,and natural
resource
management

Soil conservation
Climate-smart agriculture
Agricultural insurance
Climate-resilient rural
infrastructure
Drought resistant crops
Non-perennial crops
Regenerative agriculture
Soil sequestration
Wild brush clearing
Species diversification
Afforestation
Reforestation
Mangrove conservation
and replanting
Restoration of natural
habitats
Pest control measures
Regeneration or extensionof natural forests
Sustainable aquaculture
Ecosystem-based
adaptation
Integrated water resourcesmanagement
Ecosystem Services
Soil Erosion
Biodiversity
Evapotranspiration
Land degradation

Green roofs and walls
Water retention gardens
Porous pavements
Reduce urban heat zones
Grid resilienceBack-up generationand storage
Increased coolingrequirement
Urban flood protection
Climate-resilient urban
infrastructure
Resilient shelters
Natural infrastructure
Green infrastructure
Natural assets
Wildlife buffer zone

CoastsCoastal natural
buffer zones
Flood warning systems
CoastalSetbacks
Managed realignment
Flood shelter
Cyclone shelter
Slope management
Coastal protection
Wetland protection
Marine protected area
Artificial reef

Industry

Supply chain resilience
Business continuity
planning
Climate-related physicalrisk assessment
Climate-related transition
risk assessment

Socialresilienceand wellbeing

Social protection
WelfareLivelihoods
Disease surveillancesystems
E-Health
Rapid diagnostic tests

Disaster risk
management
andinsurance

Early warning system
Weather monitoring
Weather forecast
Flood forecasting
Drought monitoring
Climate monitoring
Climate modelling
Relocation
Managed retreat
Climate Information
SystemParametric insurance
Index insurance
Catastrophe insurance

Water

Drinking water
Stormwater drainage
Water treatment
Water loss reduction
Water conservation
Hydro-meteorologicalmonitoring
Rainwater harvesting
Wastewater treatment
Desalination
Flood control
Irrigation efficiency
Leakage management
Water efficiency
Wetland degradation

Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative31

Endnotes
1. Climate Bonds Initiative, Climate Bonds Taxonomy, Climate Bonds
Taxonomy | Climate Bonds Initiative
2. Bloomberg. Bonds priced between 01 January and 31 December
with a settle-to-maturity of at least 365 days.
3. Green bonds added to the Climate Bonds GBDB in 2022, compared
to total volumes as per Bloomberg.
4. Harrison, C, Green Bond Pricing in the Primary Market H2 2022,
Climate Bonds Initiative, March 2023.
5. The Economist, 2023. War and subsidies have turbocharged thegreen transition.
6. European Commission, n.d. NextGenerationEU Green Bonds.
7. Bloomberg. Bonds priced between 01 January and 31 December
with a settle-to-maturity of at least 365 days.
8. Urban Pacific: So why no affordable housing crisis in Japan.
9. FSD Africa, 2022. Current levels of climate finance in Africa falling
drastically short of needs. https://fsdafrica.org/news/current-levelsof-climate-finance-in-africa-falling-drastically-short-of-needs/
10. Climate Bonds, https://www.climatebonds.net/policy/101policymakers
11. CDP. (2023). CDP Technical Note: Relevance of Scope 3 Categories
by Sector CDP Climate Change Questionnaire. https://cdn.cdp.net/
cdpproduction/cms/guidance_docs/pdfs/000/003/504/original/CDPtechnical-note-scope-3-relevance-by-sector.pdf?1649687608
12. Ministry of Business, Innovation, and Employment, Energy in New
Zealand 2022 shows a strong share of renewable energy, August 2022,
Energy in New Zealand 2022 shows a strong share of renewable energy| Ministry of Business, Innovation & Employment (mbie.govt.nz)

13. New Zealand Debt Management, Green Bond Framework, August
2022, https://debtmanagement.treasury.govt.nz/sites/default/files/
media/media_attachment/nz-sovereign-green-bond-framework.pdf
14. The Republic of Philippines, Sustainable Finance Framework,
November 2021, https://www.dof.gov.ph/download/sustainable-finance-framework/?wpdmdl=30994&refresh=64148
3a8657871679066024
15. As of 15 March 2023, BICS level 1 = sovereign, number of days
between settle and maturity, greater or equal to 360.
16. Climate Bonds Initiative, Discussion Paper: Certification of ShortTerm Debt, June 2022, Discussion Paper: Certification of Short-Term
Debt | Climate Bonds Initiative
17. OeBFA, Green Bond Framework, April 2022, https://www.oebfa.at/
en/presse/presseuebersicht/2022/green-bond-framework.html
18. Environmental Finance, France’s ‘perfectly timed’ inflation-linked
green bond debut, May 2022, https://www.environmental-finance.
com/content/analysis/frances-perfectly-timed-inflation-linked-greenbond-debut.html
19. Mark L. Flugge, Rachel C. K. Mok, Fiona E. Stewart , World Bank
Group, Striking the Right Note: Key Performance Indicators for Sovereign
Sustainability-Linked Bonds, November 2021 World Bank Document
20. ICMA Sustainability-Linked Bond Principles, June 2020
Sustainability-Linked-Bond-Principles-June-2020-171120.pdf(icmagroup.org)
21. Bloomberg, as of 15 March 2023, BICS level 1 = sovereign, Countryof Domicile = CL.
22. As of 09 March 2023, BICS level 1= sovereign, split by Country of Risk.

Prepared by Climate Bonds Initiative.

Sponsored by Citigroup, IFC and J.P. Morgan.

23. Climate Bonds Initiative, 2021. Green Bonds for Climate Resilience:State of Play and Roadmap to Scale.
24. New Zealand Government, 2022. New Zealand Sovereign Green
Bond Framework.
25. Citi, 2021. Social Finance Framework.
26. Oakberry, 2022. Sustainability Bond Framework.
27. Climate Bonds Initiative, 2021. Green Bonds for Climate Resilience:State of Play and Roadmap to Scale.
28. Unspecified A&R is an estimate of the proceeds flowing to A&R
projects that are not directly specified to the projects/assets inthe other categories (e.g., A&R is considered eligible in the issuer’s
framework but the full list of projects/assets which will adapted and/or made more resilient is not provided).
29. The Inevitable Policy Response, The US discovers its climate
policy: A holistic assessment and implications, October 2022, The US
discovers its climate policy: A holistic assessment & implications |Thought leadership | PRI (unpri.org)
30. The European Commission, Special Address by the President at
the World Economic Forum, January 2023. Special Address by the
President at the World Economic Forum (europa.eu)
31. Ministry of Economy, Trade and Industry (METI), Toward atransition to decarbonisation, Transition finance. Transition Finance /METI Ministry of Economy, Trade and Industry
32. Climate Bonds Initiative, Driving Green Investment – Climate Bonds
2023 Transition Programme, January 2023, Driving Green Investment Climate Bonds 2023 Transition Programme | Climate Bonds Initiative

Authors: Carlotta Michetti, Neeraj Chouhan,
Caroline Harrison, Matthew MacGeoch
Design: Godfrey Design, Joel Milsted
Suggested Citation: Michetti, C., et al.,Sustainable Debt Global State of the Market 2022,
Climate Bonds Initiative 2023

© Published by Climate Bonds Initiative, April 2023
www.climatebonds.net

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Sustainable Debt Global State of the Market 2022 Climate Bonds Initiative32