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07-04-2022 16:09

Sustainable bond markets: Q1 of 2022 in graphs

The majority of market focus during Q1 was dedicated to the war in Ukraine and efforts to limit its repercussions in the world and the markets. Nevertheless, sustainable debt continues to grow, and the first quarter showed that it can be a source of stability in a turbulent market environment.
A hedge of leaves

Sustainable debt remains highly relevant despite geopolitical and economic turmoil

2021 was marked by exceptional growth of the sustainable bond market, highly exceeding expectations. Expectations were adjusted during the first quarter of 2022 when markets were slow to get up to speed due to reduced pandemic bond issuances, continued worries about Covid-19 and subsequent geopolitical instability caused by Russia’s invasion of Ukraine.  

Nevertheless, the circumstances showed that sustainable bonds have generally fared better in the very volatile market environment. Investors showed a preference for sustainable debt over its traditional counterparts, translating into a growth of the share of sustainable bonds issued from 9% to 12% compared to the previous year.

2022Q1 Nordic Sustainable Bond Supply

Source: Bloomberg and Nordea

2022Q1 Nordic Sustainable Bond Issuance by Country

Source: Bloomberg and Nordea

From a geographical perspective, European issuers still constitute the largest share globally with around half of the total market share. In the Nordics, Sweden continued to be the most active market, followed by Denmark and Finland with around a fifth of the market share in 2022. 

Slower but continued growth for social, sustainability and sustainability-linked formats

Global sustainable bond supply by format

Source: Bloomberg and Nordea


Since 2020 we have seen an increasing diversification of formats in the market. While the pandemic has led to an enormous growth in social bonds issued, primarily by sovereign issuers, 2021 has overall shown a decline in social and sustainability formats as compared to the previous years.
So far in 2022, we have seen renewed interest in sustainability bonds combining green and social assets, this time by corporate issuers, although supply remains considerably dampened when compared to Q1 2021.

In January 2022, we also saw the landmark issuance of the first ever sovereign green bond by the Kingdom of Denmark. The inaugural DKK 5 billion issuance with a 10-year maturity, focused on renewable energy and the transition to green transportation. It also proved to be a case study for the alignment of a sovereign green bond framework with the EU Taxonomy.

Sustainability-linked bonds continue to show the fastest growth

2022Q1 sustainability-linked bond supply by industry

Source: Bloomberg and Nordea

With a 136% increase compared to Q1 2021, global sustainability-linked bonds show by far the sharpest growth of all formats. This trend is, among other factors, driven by new sectors access to sustainable debt markets. While utilities remain the primary sector to issue debt linked to sustainability-targets, in the Nordics we have seen several debuts of the format for new sectors. With Atrium Ljungberg we saw the first sustainability-linked bond of a real estate issuer, with targets surrounding climate impact of construction, improvements in a social sustainability index and supplier reviews. With Helsingborg, we saw the first municipality in the Nordics to issue sustainability-linked debt with a focus on the reduction of greenhouse gas emissions.


Lea Gamsjäger
Nordea Sustainable Finance Advisory
David Ray
Nordea Sustainable Finance Advisory

Nordea Sustainable Finance Advisory

Nordea's Sustainable Finance Advisory team helps clients navigate fundamental changes in the financial markets as the global economy shifts towards becoming sustainable and low-carbon. Find out more about our sustainable product offerings and holistic advisory services.

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