Refinitiv, an LSEG business, has just published its Sustainable Finance Review for the first half of 2023, providing an overview of global sustainable financing and advisory activity.
Cornelia Andersson, group head of sustainable finance
and investing at LSEG
believes that sustainable finance is a growing market
segment due to regulatory and market change as firms pursue their
climate and net zero transition strategies.
In a turbulent market environment, sustainable finance bonds
performed comparatively well with growth of 6 per cent driven by
green bonds being up 18 per cent over last year. This compares
with a 5 per cent decline in overall global debt capital markets
activity, the firm, which is a provider of financial markets data
and infrastructure, said in a statement.
Sustainable finance bonds totaled $458.5 billion during the
first half of 2023, an increase of 6 per cent compared with 2022
levels, and the strongest first half for sustainable finance
bonds since the first half of 2021, the firm continued. By number
of issues, sustainable finance bond volume decreased 16 per
cent compared with the first half of 2022. As a
percentage of global debt capital markets proceeds, sustainable
finance bonds accounted for 10 per cent of overall DCM activity
during the first half of 2023.
During the first half of 2023, green bond issuance totaled
$267.1 billion, an 18 per cent increase compared with levels
a year ago and the strongest half for green bond issuance
since records began in 2015. Social bond
issuance totaled $58.6 billion during the first half of
2023, a 3 per cent increase compared with the first half of 2022.
Sustainability bond issuance reached $78.8 billion during the
first half of 2023, a 6 per cent decline compared with 2022
levels. The number of sustainability bonds decreased 42 per
cent compared with the first half of 2022, marking a
three-year low.
European issuers accounted for the largest regional market for
sustainable finance bonds with 54 per cent market share during
the first half of 2023, compared with 22 per cent from Asia
Pacific and 16 per cent from the Americas.
BNP Paribas took the top spot for sustainable finance bond
underwriting with 6.4 per cent market share during the first half
of 2023, an increase of 1.1 market share points compared with a
year ago, the firm said. Citi moved into second place from sixth
and Credit Agricole moved from fifth place to third to round out
the top three bookrunners during the first half of 2023. The top
10 sustainable finance bond underwriters comprised 41.7 per cent
of the overall market during the first half of 2023, on a par
with last year”s levels.
Syndicated loans
Sustainable lending totaled $304.3 billion during the first
half of 2023, a 20 per cent decline compared with the first half
of 2022 and the slowest first half for sustainable lending since
the first half of 2020. The second quarter of 2023
registered a 17 per cent increase compared with the first quarter
of this year. By number of offerings, the first half of 2023
saw a 13 per cent decrease compared with the first half of 2022
and a two-year low.
American borrowers accounted for 44 per cent of overall
sustainable lending during the first half of 2023, led by
facilities for Ford Motor Co, NextEra Energy and
Alphabet. Lending in Europe accounted for 34 per cent of
first half 2023 activity, down slightly from 35 per cent during
the first half of 2022, while Asia Pacific lending accounted for
14 per cent of activity.
Mizuho Financial Group took the top spot for
sustainable syndicated loan-mandated arrangers during the first
half of 2023, with 5.8 per cent market share, an increase of 1.8
market share points compared with a year ago, followed
by Mitsubishi UFJ Financial Group with 4.5 per
cent and Credit Agricole with 4.2 per cent. Citi and BNP Paribas
rounded out the top five mandated arrangers during the first
half, each with 4 per cent market share.
Equity capital markets
Equity capital markets activity for sustainable companies totaled
$14.3 billion during the first half of 2023, the firm said,
slightly ahead of first half of 2022 levels and a two-year high.
By proceeds, second quarter 2023 sustainable equity issuance fell
38 per cent compared with first quarter 2023 levels but
registered a 9 per cent increase by number of deals compared with
the first quarter of the year. By number of
issues, sustainable ECM offerings increased 50 per
cent from a year ago.
Asia Pacific accounted for 43 per cent of overall sustainable
equity capital markets activity during the first half of
2023, bolstered by three of the top 10 ECM offerings so far this
year. Huatai Securities, China Securities and BofA Securities
topped the list of bookrunners for sustainable equity offerings
during the first half of 2023, registering a combined market
share of 33 per cent, the firm continued.
Mergers and acquisitions
Mergers and acquisitions activity involving sustainable companies
totaled $84.2 billion during the first half of 2023, a 13 per
cent decline compared with first half 2022 levels and a
three-year low. Eight hundred and twenty deals were
announced during the first half of 2023, on par with levels seen
a year ago. By number of deals, China accounted for 17 per
cent of total sustainable deal-making activity during the first
half of 2023, followed by the United States and India, the firm
continued.
Based on deal making involving targets or acquirers operating in
sustainable industries, Chardan Capital Markets and JonesTrading
topped the advisory league tables during the first half of 2023,
while Citi rounded out the top three financial advisors with an
industry-leading 12 deals valued at $11.6 billion. Special
purpose acquisition company business combinations accounted for
39 per cent of M&A involving sustainable companies, by value,
during the first half of 2023, the firm concluded.
