The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Are sustainability-linked bonds groundbreaking or greenwashing?

The bond market’s hottest structure has come under fire from a leading ESG investor, with borrowers accused of gaming the system to take advantage of demand for sustainable products.

Lucy Fitzgeorge-Parker ESG 1920px.jpg

Sales of sustainability-linked bonds (SLBs) have already topped $25 billion this year as borrowers in Asia have followed the lead of pioneers in Europe and Latin America. Growth from here on in is expected to be exponential. JPMorgan says total issuance for 2021 could hit $150 billion.

It is easy to see why the format is proving so popular. Unlike traditional green, social and sustainable bonds, which require borrowers to use the proceeds of the deal for specific projects, the new format merely commits them to meeting one or more sustainability goals over a set timeframe.

This means that, for the first time, companies that would struggle to find sufficient sustainable projects to achieve the deal size required by big asset managers – usually $500 million – have a chance to tap into surging demand for bonds with an environmental, social and governance (ESG) component.

Yet as the market gains momentum, one leading investor has sounded the alarm over SLBs. In a recent blog post, Stephen Liberatore of US asset manager Nuveen said the structure was “lacking from the perspective of an impact investor”.

Stephen M. Liberatore_Nuveen.jpg
Stephen Liberatore, Nuveen

“We …feel compelled to alert investors that the credibility and robustness of these deals remain highly variable,” said Liberatore, head of Nuveen’s impact/ESG fixed income strategy team.


You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree