NNIP "Green Bond Issuance Expected to Reach 600 Billion Euros This Year"

Bram Bos, Senior Portfolio Manager of NNIP Green Bonds

[Asia Economy Reporter Minji Lee] NN Investment Partners (NNIP) announced on the 22nd that the new issuance volume of green bonds this year is expected to reach 600 billion euros.

According to NNIP's recently published "Green Bond Impact Report," green bonds are explained to play a catalytic role in raising funds for sustainable businesses, increasing investors' enthusiasm for sustainable investment, and promoting active engagement in management.

In Europe, the issuance of green bonds for the NextGenerationEU economic recovery fund is expected to increase significantly. Bram Bos, Senior Portfolio Manager for Green Bonds at NNIP, stated, "Green bonds have become mainstream in the bond market and will continue to grow rapidly. Despite a decline in the first quarter, the new issuance volume of green bonds this year is expected to reach 600 billion euros," adding, "As regulatory demands for ESG disclosure and transparency intensify, the growth of the green bond market will accelerate."

Investment funds raised through green bonds are used for eco-friendly and sustainable economy projects such as renewable energy, green buildings, water management, clean transportation, and climate change response. NNIP pointed out that the issuance of green bonds for refinancing existing green projects or facilities already owned by companies remains a subject of debate.

Bram Bos, Senior Portfolio Manager for Green Bonds at NNIP, assessed, "Issuers of green bonds are expected to contribute much more to achieving the Paris Agreement's 1.5°C or 2.0°C targets than issuers of general bonds," and added, "While it is true that green bond issuers generally demonstrate more sustainable behavior, their sustainability activities can be further enhanced through collaboration with investors."

Previously, NNIP held discussions with 87 green bond issuers across 10 sectors worldwide. One of them was Mercedes Benz, which has set a goal to achieve carbon neutrality in new car production lines and all production facilities by 2039. Investment funds raised through green bond issuance were allocated to a project that enables the recycling of end-of-life electric vehicle batteries as part of an electric storage system. NNIP also cited the impact of green bonds in reducing greenhouse gas emissions by 60 metric tons per 1 million euros invested annually.

Meanwhile, NNIP's green bond impact assessment is based on its proprietary green bond database, currently tracking and evaluating a total of 1,140 green bonds across 10 sectors in 51 countries.