Table of Contents
- A Note On The Sample
- State Of The U.S. Municipal Green Market
- The Additionality Question: Are Green Bonds Funding New Projects?
- Other Impact Labels: Sustainability Bonds, Social Bonds, And Beyond
- External Verification Is On The Rise–Will Additional Disclosure Follow?
- Will Rising Discussion Of Resilience And Adaptation Spur Growth In This Nascent Niche Of The Green Bond Market?
- Why Does Adaptation Remain A Small Part Of The Labeled Bond Market?
- Recent Proposals To Increase Investment In Adaptation And Resilience
- Though Well-Suited For Adaptation Finance, Persistent Challenges Will Impede Rapid Market Segment Growth
- Trends To Watch In Municipal Adaptation Finance
Key Takeaways
- U.S. municipal self-labeled green bond issuance had its strongest year yet in 2019, with 99 issues totaling $10.1 billion in issuance, or 2.4% of the total municipal market.
- Based on recent trends, we project 2020 municipal green issuance of $11.4 billion to $14.0 billion in 2020, with a most likely amount of $13.2 billion.
- Municipal issuers are also issuing debt carrying other labels intended to highlight a financing’s environmental, social, and governance (ESG) credentials, most notably sustainability bonds ($2.8 billion in 2019) and social bonds ($621 million).
- For the first time, in 2019, the majority of municipal green bonds had external verification, and 23% of sustainability bonds were Climate Bond Certified.
- Resilience continues to emerge in budgets and capital plans as a focus area for municipal governments, although challenges remain to financing large-scale resilience and adaptation projects.
- Debt financing of adaptation projects remains a largely undeveloped portion of the green bond market, and a mostly untapped portion of the broader municipal market.