ESG bond market still offering investment opportunities

In Short

After years of strong growth, the consolidation in the ESG bond market continued last year. The premium investors are willing to pay for ESG bonds has changed little in 2023. In this paper, we take this as an opportunity not only to trace and assess the latest developments but also to consider how the ESG bond market will develop in 2024, focusing on the euro area (EA) government sector.


  • Global ESG bond issuance decreased slightly in 2023, with the euro remaining the primary ESG funding currency, although its relative importance declined moderately.
  • Issuing activity has been livelyand higher than in previous yearsyear-to-date, but we expect ESG government bond issuance by governments to be at around the previous year's level for the full year 2024.
  • France is expected to remain the top ESG issuer in the euro area in 2024. We anticipate that green bonds will become more important in the euro area government sector, at the expense of social bonds.
  • The premium for ESG bonds ('greenium') generally remained low throughout 2023, with no clear trend, and varied over time and amongbonds. Despite the greenium, there are still opportunities to invest in ESG bonds without a yield disadvantage in sovereign and SSA (supranationals, sub-sovereigns and agency) segments.


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ESG bond market still offering investment opportunities

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