Green Bonds are fixed-income instruments that raise capital for projects that deliver environmental benefits. Major types of projects supported by Green Bonds include renewable energy, energy efficiency, sustainable waste and land management, clean transportation, sustainable water management, and biodiversity conservation. The global green bond market has expanded rapidly in recent years driven by increasing investor appetite for sustainable investments and growing government initiatives to fund environmentally friendly projects.
The global Green Bond Market is estimated to be valued at Us$ 552.5 Mn in 2024 and is expected to exhibit a CAGR Of 8.5% over the forecast period 2024 To 2031, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
Growing government initiatives to tackle climate change have been a major driver of growth in the green bond market. Many governments have set targets to achieve net zero emissions by 2050 and are directing larger budget allocations towards clean energy and sustainability projects. This is increasing the pipeline of bankable green projects requiring funding through green bonds. Government policies like subsidies, tax benefits and green investment mandates are also encouraging more issuers across sectors to tap into the green bond market to fund their transition to low carbon business models.
SWOT Analysis
Strength: Green bonds provides access to funding opportunities from environmentally conscious investors. It helps in financing environmental projects and sustainable development.
Weakness: High issuance costs and regulatory constraints can act as barriers for small issuers. Lack of universal standard for defining ‘green’ projects leads to ambiguity.
Opportunity: Growing awareness about climate change is increasing the demand for green investments. Supportive government policies are encouraging more companies to raise funds through green bonds.
Threats: Stricter norms and regulations around climate change can increase compliance burden. Rising bond yields and recession fears impact the appetite of investors.
Key Takeaways
The Global Green Bond Market Demand is expected to witness high growth over the forecast period of 2024 to 2031. The market size for green bonds is projected to reach US$ 552.5 Mn in 2024, indicating a CAGR of around 8.5% during the forecast period.
Regional analysis –
Europe dominates the green bond market currently, both in terms of issuance volumes and outstanding debt. However, Asia Pacific is emerging as the fastest growing regional market with strong support from China, India and other Association of Southeast Asian Nations (ASEAN) countries promoting sustainable investments.
Key players –
Key players operating in the green bond market are Zimmer Biomet, Smith & Nephew, Stryker, DePuy Synthes, Orthofix, Bioventus LLC, DJO Global, Braun, Medtronic, Globus Medical. These companies are raising funds through frequent green bond issuances to finance sustainable healthcare solutions and environmental projects.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
