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.
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