AFME European ESG Finance Quarterly Data Report: Q4 2020 | AFME

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Data Research
AFME European ESG Finance Quarterly Data Report: Q4 2020
04 Mar 2021
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Author Julio Suarez Director
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AFME is delighted to launch the new European ESG Finance quarterly data report. The aim of this quarterly 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 including issuance of green, social and sustainable bonds and ESG and Green linked loans; green Securitisation issuance; outstanding amounts of ESG bonds; ESG fund management; ESG bond trading; and ESG valuation figures as well as a high-level regulatory and supervisory snapshot on the European Sustainable Finance market.


Key highlights from 2020:

  • European ESG bond and loan Issuance experienced substantial growth in 2020, with issuance increasing 58.8% from EUR 245.0bn in 2019 to EUR 389.0bn in 2020, continuing the upward trend seen since 2015.
    • ESG Bond issuance equaled 8.3% of total European bond issuance in 2020, up 3% from 5.0% in 2019. A large inaugural social bond of EUR 17 bn was issued by the European Commission in Q4’20. This was followed by two further social bond issues in Q4’20 of EUR 8.5 bn and EUR 14 bn.
    • ESG & Green Linked Loan issuance equaled 13.7% of total European syndicated loan issuance, up 3.2% from 10.5% in 2019.
  • In 2020, the European Union Emissions Trading System (EU ETS) was the largest greenhouse gas emissions trading scheme globally, with 2249.1 Mt CO2-eq covered, with a value of USD 33.6 bn. The European Union Allowance (EuA) price per metric tonne has increased by 21.3% from €24.03 in December 2019 to €30.52 in December 2020.
  • Global funds with ESG mandate accumulated USD 22,731 bn in Q4 2020 in total assets, comprising of USD 13,953 bn in equity funds, USD 5,575 bn in bond funds and USD 3,203 bn in other asset classes.
  • Option Adjusted Spreads (OAS) of Euro-denominated Corporate ESG bonds reached peak levels in March 2020 at 238bps and have since normalised, ending 2020 at 91 bps. Equity prices of sustainable companies ended 2020 with losses of less than 1% according to the MSCI Europe SRI Net Index. This compares with losses of 6.2% in the EUR STOXX 600 equity composite index.
  • According to Trax, the Average Daily Trading Volume (ADV) of European ESG bonds in 2020 was EUR 0.80 bn. November of 2020 saw the highest ADV of the year at EUR 1.1 bn, followed by March with an ADV of EUR 0.85 bn. The average European ESG Bond Turnover Ratio in 2020 was 0.19%, down from 0.21% in 2019. This compares with turnover ratios of 2%-1% of benchmark European sovereign bonds.
  • This report includes a regulatory and supervisory snapshot on the European Sustainable Finance market. It covers recent initiatives and upcoming deadlines in relation to issues such as taxonomy and disclosures. We will continue to update this regulatory snapshot every quarter.