In the first nine months of 2023, proceeds from UK corporate green bonds rose to record levels, with £6.1 billion in proceeds raised from eight issues, according to LSEG Deals Intelligence.
Proceeds were boosted by two of the largest all-time green bonds brought to the market during the year, from Thames Water and DS Smith PLC, and contributed to the year-on-year increase from £4.9 billion raised from ten issues.
Corporates have accounted for all green bond issues so far in 2023, with no sovereign and/or agency issues since Q3 2022.
The UK ranked 14th globally, accounting for 2.1% of global green bond issuance in the first nine months of 2023. Of European nations, the UK ranked ninth, while Germany, Italy, and France made up the top three.
Sumitomo Mitsui Financial Group Inc took the top spot for UK green bond underwriting with £774.6 million and a 12.8% market share. This is a significant increase from the £219.3 million raised and 2.2% market share from the same period last year. Barclays and Bank of China rounded out the top three underwriters.
Overall, by quarter, proceeds from UK green bonds fell to the lowest third quarter since 2020, with £1.9 billion in proceeds raised from two issues.
This was slightly up from the £1.3 billion raised in Q2 2023 from two issues and was significantly down from £4.6 billion from seven issues in Q3 2022.
Cornelia Andersson, Head of Sustainable Finance and Investing at LSEG, said, “UK green financing continues at a pace so far in 2023, with corporates picking up the mantle in lieu of a subdued year for agency and sovereign year bond issuance so far.”
“As COP28 begins, we can expect ambitious proposals from policymakers, corporates, and civil society on the role of financing in the transition to net-zero. In addition, as we close out 2023 and move into 2024, the plateauing and possible cuts in interest rates will foster market confidence.”
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