In the first report of its kind taking stock of green finance over the last decade, TheCityUK, with the support of BNP Paribas, has charted the growth of global green finance as the market has multiplied over a hundredfold from $5.2bn in 2012 to $540.6bn in 2021.
The report ‘Green finance: a quantitative assessment of market trends’ used data provided by Refinitiv, an LSEG business, and found that although green finance remains a relatively small part of global financial markets, there has been consistent growth with signs of acceleration in recent years. The share of green finance in total finance has steadily increased from around 0.1% in 2012 to above 4% in 2021.
Green finance transactions continue to be dominated by green bonds. Global green bond annual issuance has risen exponentially over the past decade, increasing from $2.3bn in 2012 to $511.5bn in 2021. Cumulative green bond issuance totalled $1.4trn over 2012-21, representing 93.1% of green finance across the decade. From a UK perspective, green bond issuance grew from $1.1bn in 2012 to $37.4bn in 2021; cumulative issuance over the ten years was $65bn. However, global green finance goes beyond just bond issuance. It has expanded into areas across green IPOs, green private Equity and green venture capital. This includes:
- Global green loans in 2017 was a negligible at $432m, rising to $78.6bn in 2021, a nearly 200-fold increase in just four years.
- Global green IPO activity has been volatile in both volume and value terms over the past decade, but saw a surge in activity in 2021. Cumulatively, there were 129 green IPOs globally over 2012-21, with 30 of these in 2021 alone.
- ESG funds have grown steadily over the past decade and have exhibited particularly strong growth since 2020.
- Green private equity and green pure venture capital (a subset within private equity) both saw standout years in 2017 and 2019.