Europe: a green bond leader
Since their inception in 2007, green bonds have spread rapidly in financial markets around the world. Geographically speaking, it should not come as a surprise that developped economies boast the largest green bond markets. European countries are the leading issuers, with cumulative green bonds issued in Europe amounting to over 750 billion U.S. dollars. The rapid growth of green bonds has been fueled by green and sustainable plans to transform economies, to improve energy efficiency, and to reduce emissions, just to name a few reasons. European countries - in particular the European Union Next Generation EU fund plan - have pushed this green agenda more than others. In 2021, however, single countries like the United States, and China ranked as the worldwide leaders in green bonds issuance.
Who is issuing green bonds?
As regular bonds, green bonds can be issued by different actors. The main advantages of green bonds over regular bonds include securing capital to support environmental and sustainable investments, tax exemptions, lower costs to borrow money, enhancing issuers' reputation, and increasing awareness among investors. Governments and municipalities worldwide are setting an example, using green bonds to finance their ambitious programs to reach carbon neutrality: In 2021, the United Kingdom issued the largest sovereign green bond, worth over 13 billion U.S. dollars.