Green, social, sustainable and sustainability-linked bond (GSSSB) market issuance will reach up to $40bn across Latin America this year, a revival from last year's drop-off, according to a new report by ratings giant S&P Global.
The US firm writes in its S&P Global Ratings’ 2023 Sustainability Insights report that that the bounce back would be driven by sovereign issuances.
Chile and Mexico dominate the space. Last year, the Chilean and Mexican governments represented together 41% of the region's GSSSB. In fact, outside Europe, Chile was the largest sovereign GSSSB issuer globally (9% of total issuance).
Other countries in the region were also seen to be developing green finance taxonomies in 2023, such as Colombia, Peru and the Dominican Republic.
Of the use-of-proceeds bond types, S&P Global anticipated that sustainability bonds in particular will continue to dominate GSSSB issuance from the continent in 2023.
In 2022, they accounted for 55% of Latin American GSSSB, up from 24% in 2021, and were the only type of GSSSB to show growth last year.
The focus on Latin America follows from wider S&P Global research into the green bonds market, which estimated modest growth of 2.5% in global bond issuance in 2023.
This month Net Zero Investor spoke to Denise Odaro, former chair of the International Capital Markets Association (ICMA’s) executive committee of the Green and Social Bond Principles.
