PUBLISHER: Coherent Market Insights | PRODUCT CODE: 1449667
PUBLISHER: Coherent Market Insights | PRODUCT CODE: 1449667
The green bond market size is valued at US$ 525.72 Bn in 2024 and is expected to reach US$ 1,033.43 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 10.1% from 2024 to 2031.
Report Coverage | Report Details | ||
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Base Year: | 2023 | Market Size in 2023/2024: | US$ 525.72 Bn |
Historical Data for: | 2019 to 2023 | Forecast Period: | 2024 - 2031 |
Forecast Period 2023/2024 to 2030/2031 CAGR: | 10.10% | 2030/2031 Value Projection: | US$ 1,033.43 Bn |
Green bond are debt instruments that are issued by sovereign, corporate or local government borrowers to raise funds for investments in projects that have measurable sustainability-based impact. They are typically backed by assets, cash flows or revenue streams, and are often ring fenced to prevent them from being used for other purposes, like general operations of the issuer. Many also carry a designation to indicate compliance with certain environmental standards, such as those of International Capital Market Association (ICMA) Green Bond Principles or Climate Bond Standard (CBS). These designations may be accompanied by third party certifications.
The issuance of green bonds can help issuers attract investors with interest in environmental, social and governance (ESG) based investment destinations and meet disclosure requirements such as those set by the Task Force on Climate-related Financial Disclosures (TCFD). They also support the development and growth of sustainable finance markets, especially where these are underdeveloped.
The major driving factor that is responsible for boosting the green bond market growth is a result of the popularity of sustainable investing and the incorporation of environmental, social, and governance (ESG) factors in investment decision-making. With the rise in climatic change and its potential effects, there is increase in demand among people for its urgency and thus, the need of such bonds. Investors prioritize investments that support favorable social and environmental outcomes which would help in increasing the demand for green bonds in the market over the forecast period. Sustainable projects and green projects are being increasingly undertaken by various governments, regulatory authorities, and corporations. This is particularly being implemented to demonstrate strong sustainable commitments and environmental goals, to finance initiatives that correspond with their Corporate social responsibility(CSR) plans. This can help in gaining favor with investors and stakeholders and create a significant impact in the market expansion in the forecasted period.
However, the lack of complete market standardization, verification, and reporting experiments and the scarcity of eligible green projects, may hinder the demand of green bond projects over the forecast period.