AFME is pleased to circulate its European ESG Finance quarterly data report for the third quarter of 2023. The aim of this report is to provide detailed data and analysis on the rapidly growing Sustainable Finance market in Europe.
This Report contains up to date trends for the European Sustainable Finance market as at 30 September 2023, as well as a high-level regulatory and supervisory snapshot.
Key highlights:
- European ESG bond and loan issuance accumulated a total of €94bn in proceeds in Q3’23. This represented a decline of 48.8% year-on-year (YoY) and 46.5% quarter-on-quarter (QoQ).
- Green bond issuance decreased 30.7% YoY (-42.6% QoQ).
- Social bond issuance totalled €9bn in Q3’23 with an annual and quarterly decline of 44.3% YoY and 49.6% QoQ.
- Sustainable bond issuance decreased 42.5% YoY but increased 17.3% QoQ.
- Sustainability-linked and green loan origination decreased 68.6% YoY and -58.3% QoQ.
- One green RMBS for €895mm was issued in Q3’23, accumulating a total of c€2bn in ESG securitisation issuance year-to-date.
- Carbon prices decreased in the EU and UK during Q3’23, with European Union Allowance (EuA) carbon prices finalizing September 2023 at €80/Tn, from €87/Tn at the end of June. UK carbon prices accumulated a decline of 27% over the same period.
- Global ESG Funds reached $7.8tn in AuM as of Q3’23, representing a 6.7% increase from Q3’22 but a decrease of 11.3% when compared to Q2’23.
- The decline in Global ESG funds was accompanied by net investor outflows which accumulated a total of $37.2bn during Q3’23.
- ESG price premia: spreads of corporate ESG bonds against non-sustainable benchmarks did not materially change in the third quarter of the year, from c2bps at the start of July 2023 to c1.7bps in late September 2023.
- AFME new report: AFME has recently published a new report 'Sustainable Finance in the EU: Priorities to unlock financing and investment’. The paper outlines AFME members’ views and recommendations on the functioning of the current EU sustainable finance framework and the implementation challenges that banks face in applying it to financing companies.