ESG premium on corporate bonds of +5bps in Europe

Rick Steves

The top issuers of ESG bonds and loans in 2020 were France, Germany, and Luxembourg, compared to France, the UK, and Spain in 2019.

The Association for Financial Markets in Europe (AFME) has released its first European ESG Finance quarterly data report.

The document reveals the explosive scale of growth of the rapidly growing Sustainable Finance market in Europe:

• Substantial growth of 58.8% in European ESG bond and loan Issuance in 2020, from €245bn in 2019 to €389bn in 2020. Social bond activity rose significantly linked to Covid-related support. ESG Bond issuance was 8.3% of total European bond issuance in 2020, up from 5.0% in 2019.
• ESG bond spreads have performed well; green premium for corporate bonds (“greenium”) finalized 2020 at c5bps against non-green benchmarks.
• The top issuers of ESG bonds and loans were France, Germany, and Luxembourg (including issuance under the EC SURE social bond scheme), compared to France, the UK, and Spain in 2019.
• In 2020, the European Union Emissions Trading System (EU ETS) was the largest greenhouse gas emissions trading scheme globally, with 2249.1 Mt CO2-eq covered, with a value of USD 33.6 bn. The European Union Allowance (EuA) price per metric tonne has increased by 21.3% from €24.03 in December 2019 to €30.52 in December 2020.

The quarterly report covers the issuance of green, social and sustainable bonds and ESG and Green linked loans; green Securitisation issuance; outstanding amounts of ESG bonds; ESG fund management; ESG bond trading; carbon trading; and ESG valuation figures as well as a high-level regulatory and supervisory snapshot on the European Sustainable Finance market.

As the ESG market grows, so does the risk of corporate greenwashing. This has led the SEC to initiate a review process of its 2010 policy on ESG and the creation of a Climate and ESG Task Force with 22 members.

The task force will develop initiatives to identify ESG-related misconduct and use data analysis to mine and assess information across registrants, to identify potential violations.

The SEC has decided to create the task force amid the increasing investor focus and reliance on climate and ESG-related disclosure and investment.

The ESG task force will aim to identify any material gaps or misstatements in issuers’ disclosure of climate risks and analyze disclosure and compliance issues relating to investment advisers’ and funds’ ESG strategies. It will also pursue tips, referrals, and whistleblower complaints on ESG-related issues.

  • Read this next


    Nubank makes impressive turnaround, posting $1 billion profit in 2023

    Brazil’s Nubank has made a remarkable turnaround, swinging from a net loss in 2022 to a $1 billion net profit in 2023. The digital bank’s revenues have soared past $8 billion, marking a major milestone in its financial performance.

    Retail FX

    Spanish watchdog warns of UP MARKETS, BITBINX

    The Comision Nacional del Mercado de Valores (CNMV), the financial regulatory body of Spain, announced in a statement that it has added to its warning list new website that are illegally offering financial services to Spanish citizens.

    Digital Assets

    MicroStrategy buys 3,000 more bitcoins, suffers phishing attack

    MicroStrategy, the largest corporate investor in bitcoin, has expanded its cryptocurrency portfolio by buying an additional 3,000 bitcoins for $155 million.

    Crypto Insider

    Saudi Launches World’s First Cultural Metaverse

    The Saudi Ministry of Culture, droppGroup, and Oracle have joined forces to launch the Cultural Universe, the world’s first government-operated national Metaverse initiative.

    Retail FX

    eToro revives IPO plans after failed $10B SPAC merger

    Israeli social trading network eToro is actively exploring options for a public market listing, according to CEO Yoni Assia in an exclusive interview with CNBC.

    Digital Assets

    Meme Coin Communities Gear Up for the CoinMarketCap Crypto Awards

    CoinMarketCap’s Crypto Awards 2024, the first edition of a new annual event, is captivating the global crypto community. This is especially true for the Meme Coin Of The Year category, where voting has become a battleground for the most passionate and vibrant communities in the crypto space.

    Digital Assets

    Sui Recognized as 2024 Blockchain Solution of the Year at AIBC Eurasia Awards

    The Layer-1 Received the Top Honor at the Eurasia Awards While Experiencing a Period of Unprecedented Growth and Recognition

    Crypto Insider

    Vitalik Buterin, Sandeep Nailwal Lead Decentralized AGI Summit, Address Centralized AI Risks at ETHDenver

    Sentient and Symbolic Capital’s Decentralized AGI Summit will feature leading Decentralized AI authorities like Vitalik Buterin and Sandeep Nailwal.

    Digital Assets

    Aethir Unveils Its First Decentralized AI Node Sale

    Aethir, a leader in decentralized GPU cloud infrastructure, has announced its highly anticipated Node Sale.