---
title: European ESG Bond & Loan Issuance Decelerates
description: Year-to-date ESG bond and loan volumes have surpassed the 2020 total despite quarterly decline.
---

[Articles Marketmedia](https://articles.marketsmedia.com)

# [European ESG Bond & Loan Issuance Decelerates](https://articles.marketsmedia.com/european-esg-bond-loan-issuance-decelerates)

 Written by [Shanny Basar](https://articles.marketsmedia.com/author/shanny-basar) | Nov 29, 2021 11:20:19 AM

From the Association for Financial Markets in Europe (AFME)’s latest European ESG Finance quarterly data report for Q3 2021:

https://twitter.com/AFME\_EU/status/1465343379710087179

Key highlights:

**European ESG bond and loan issuance** **decelerated in Q3 2021** compared to Q2 2021. The decline was driven by lower sustainable-linked and green-linked loan origination, seasonal factors, and the finalisation of the EU SURE scheme which in previous quarters significantly contributed to expand the social bond market.

- - Notwithstanding the quarterly decline, year-to-date ESG bond and loan issuance volumes (€498.9bn) have already surpassed the 2020FY total (€388.7bn).
    - ESG bond issuance represented 18% of total European bond issuance in Q1 – Q3 2021.
    - ESG securitisation issuance in the first three quarters of 2021 reached EUR 7.5bn from eight ESG deals covering a variety of asset classes (RMBS, consumer ABS, and on-balance sheet ABS). This represents a substantial increase from EUR 2.1 bn issued in 2020FY.
    - In Q3 2021, the UK and Spain notably issued inaugural sovereign green bonds of £10bn and €5bn respectively. The inaugural UK green *gilt* was the largest green bond issued during Q3 2021.

**Carbon prices**: the European Union Allowance (EuA) price per metric tonne has continued to increase during the year, reaching €61/Tn at the end of September 2021 (and most recently €66/Tn in November 2021) from €32.8 in December 2020.

EU and UK forward curves continue to anticipate further carbon price increases.

**Global ESG Funds** slightly decreased during Q3 2021, however exhibiting annual and year-to-date increases.

- - Funds with an ESG mandate (including Mutual Funds and ETFs) totalled $4.87tn as of Q3 2021, a $0.9bn decrease from $4.96tn in Q2 2021 and a $1.26tn increase from $3.7tn in Q3 2020.
    - ESG equity funds continue to be by far the largest fund asset class with 52% of total ESG funds and over 2x larger than fixed income which represents 21% of the total.

**ESG price premia**: spreads of corporate ESG bonds against non-sustainable benchmarks have stabilized since April 2021.

- - ESG corporate premia has tightened from 9bps in April 2020 to 1bp on average during the months of April – November 2021.
    - Sovereign green premium has widened for benchmark liquid references. The average *greenium* for German *bunds* has widened from an average of 2bps in December 2020 to 5bps in November 2021.

Source: AFME

[View full post](https://articles.marketsmedia.com/european-esg-bond-loan-issuance-decelerates)

```json
{
  "@context" : "http://schema.org",
  "@type" : "BlogPosting",
  "author" : {
    "@type" : "Person",
    "name" : "Shanny Basar"
  },
  "dateModified" : "2022-05-12T10:35:59.256Z",
  "datePublished" : "2021-11-29T11:20:19Z",
  "headline" : "European ESG Bond & Loan Issuance Decelerates",
  "image" : {
    "@type" : "ImageObject",
    "height" : 836,
    "url" : "https://20473405.fs1.hubspotusercontent-na1.net/hubfs/20473405/Imported_Blog_Media/iStock-831038750-May-12-2022-09-26-57-56-AM.jpg",
    "width" : 1255
  },
  "mainEntityOfPage" : "https://articles.marketsmedia.com/european-esg-bond-loan-issuance-decelerates",
  "publisher" : {
    "@type" : "Organization",
    "logo" : {
      "@type" : "ImageObject",
      "height" : 60,
      "url" : "/hs/hsstatic/content_shared_assets/static-1.4092/img/default-amp-logo.png",
      "width" : 60
    },
    "name" : "Large Hedge Funds To Enter Crypto"
  }
}
```