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Asia sustainable bond growth outpaces global average

Asian Development Bank
By Hui Ching-hoo   
March 27, 2024

Sustainable bonds in Southeast Asia and three North Asian markets expanded at a faster pace than the global average last year thanks to strong participation in their public sectors, according to the Asian Development Bank.

Outstanding sustainable bonds in the ten-member Association of Southeast Asian Nations or ASEAN, China, Japan and South Korea grew 29.3% year-on-year to US$798.7 billion.

In the global and euro area, outstanding sustainable debt grew 21% to $5.5 trillion, the ADB says in a statement on March 23.

“ASEAN sustainable bond issuance made up a higher share of local currency financing and long-term financing in 2023, driven by public sector participation,” says Albert Park, chief economist at the multilateral development lender.

“The public sector’s participation not only adds to the supply of sustainable bonds, but also serves as a model case for the private sector and helps set a long-term pricing benchmark for these bonds in domestic markets,” he adds.

Meanwhile, sustainable bond issuance in ASEAN last year was $19.1 billion, accounting for just 7.9% of the total including the three North Asian markets.

Some 80.6% of sustainable bonds sold in Southeast Asia were local currency debt with an average size-weighted term of 14.7 years compared with 88.9% and 8.8 years in the euro area.

Established in 1966, the Philippines-based ADB has 68 member nations.