Green finance: a quantitative assessment of market trends

This report offers quantitative analysis of green finance — both green debt and green equity — over 2012-21. It contextualises the growth of green finance over the past decade and analyses green finance market trends in the UK and globally.

the green finance market has grown from $5.2bn in 2012 to

$540.6bn

in 2021

global green bond issuance increased from $2.3bn in 2012 to

$511.5bn

in 2021

green bonds accounted for fully

93.1%

of total green finance globally over 2012-21

the UK financial sector issued 

$28.9bn

worth of green bonds over the past decade

UK green bond issuance grew from $1.1bn in 2012 to

$37.4bn

in 2021

Europe accounted for around

50%

of global green lending over 2017-21

there were

129

green IPOs globally over 2012-21

over the past decade 23 UK companies received green private equity investment and 28 UK private equity investors invested in green business

Green finance remains heavily dominated by green bond issuance; green bonds accounted for fully 93.1% of total green finance (using our definition) globally over 2012-21. Global green bond issuance increased from $2.3bn in 2012 to $511.5bn in 2021. Global green lending has grown rapidly since 2017 (the first year for which comprehensive data are available); nevertheless, green loan activity remains limited and is concentrated in the syndicated loan market. Global green IPO activity has been volatile in both volume and value terms over the past decade. Meanwhile, green private equity market activity was stronger in the second half of the decade under consideration than in the first half, and was dominated by pure venture capital activity.

When considering global green finance markets, the world’s largest economies (the US and China), with their outsize capital markets, tend to have the most green finance activity in absolute terms. Although our alternative assessment examining green finance penetration mathematically favours smaller countries with smaller capital markets, some European countries—notably Sweden and Germany—stand out as having significant green finance activity in the context of their relatively smaller size.

In the UK, green finance has similarly grown rapidly from a low base. Going forward, activity may be spurred by the inaugural green gilt issuance of 2021. Moreover, the UK’s global financial and related professional services ecosystem and its nearly unrivalled position as an international financial centre means that it is well-placed not only to offer the whole range of green finance products and services, but also to demonstrate and promote this proposition through collaboration between the government, financial and related professional services firms, and the wider corporate sector.