February 2021

This edition covers:

As always, we welcome your feedback. Contact the Secretariat for the Principles greenbonds@icmagroup.org.


Sustainable Bonds ’20 recap (contributed by Nordea)

While 2020 was mired in the Covid-19 pandemic, the sustainable bond market grew to help finance the response to the socio-economic consequences of the crisis. Certainly, if there is a possible silver-lining to the crisis the role of the social bond market is a good candidate. Accounting for only 7% of the total sustainable bond supply in 2019, the issuance of social bonds skyrocketed during 2020 and ended up contributing to over 30% of the total sustainable bond supply. The increase in social bond issuance was mainly driven by the large number of bonds issued in order to fight the consequences of the ongoing coronavirus pandemic. This was especially the case in the European region where social bonds increased by a staggering 985% compared to 2019, mainly due to large social bond issuances from SSAs as well as from the coronavirus related unemployment aid program “SURE” initiated by the EU.

In the corporate space we saw supply once again increasing, driven by a good mix of different sectors. Historically, corporate supply has largely come from utilities, which made up 50% just a few years ago but now accounts for about 36%. In its place, sectors such as real estate, communications and consumer staples now provide a strong backdrop of supply. From a regional perspective the split has remained largely similar to recent years, with European corporates continuing to lead the way, closely followed by Asia Pacific and the Americas.

Finally, the corporate space has also seen a surge in the issuance of sustainability-linked bonds (SLBs). The structures and KPIs vary but it is evident that climate related KPIs are core. Although it is early days for SLBs the interest in the format is clearly high, as evidenced by the broad variety of issuers.

How can we further develop social bonds pragmatically? (contributed by Deutsche Kredit Bank - DKB)

The spectrum of sustainable bonds is growing. This is good news, because sustainability has many facets and touchpoints that can be supported with the help of different financial instruments. Last year, social bonds experienced strong market growth. The reason was not least the coronavirus pandemic and its social consequences. It showed that besides climate change other challenges can have an existential impact on our lives.

The Social Bond Principles (SBP), as the essential guidelines for social bonds, have shown that they can react flexibly to new topics or changes in focus. In the past year, Covid-19-related aspects were added and integrated into the Principles.

Where do we go from here? We believe that we should consider collectively what relevant steps we could take to enhance social bonds. The SBP provide high-level guidance. On the one hand, this is good because it leaves room for interpretation and creative approaches. On the other hand, some market participants lack concrete implementation steps to design or evaluate a social bond framework or corresponding issues. 

We should think about how we could further concretise the SBP or expand them with an additional checklist or template. Best practices in the green bond market and the template for the draft EU Green Bond Standard could serve as references. With such a checklist, each issuer could prepare its bond or the corresponding programme step by step. In addition to the obligatory four core components of the SBP, this could also contain points such as: context of the issuer's sustainability strategy, do no significant harm (with regard to environmental issues), the mapping to the Sustainable Development Goals (SDGs) or the reporting template developed by the SBP. 

With a practicable template or a similar tool, we would increase the transparency and standardisation of social bond programmes and issues and provide the financial market with additional assistance in further developing social bonds.

Sustainable bond market highlights

Green bonds

In February 2021, Iberdrola issued the largest green hybrid bond to date at EUR 2bn (in two tranches). The funds will be used to (re)finance the offshore wind farms of Saint Brieux (France) and Baltic Eagle (Germany) as part of the company’s 2020-2025 investment plan of EUR 75bn. 

In January 2021, the Government of Hong Kong issued a USD 2.5bn (in three tranches: 1bn 5-year, 1bn 10-year, and 500m 30-year) green bond where proceeds will fund projects that will improve the environment and facilitate the transition to a low carbon economy.  

Social bonds

In February 2021, JPMorgan issued its inaugural social bond of USD 1bn 4-year with proceeds to be allocated to fund affordable housing projects.

In January 2021, the EU further issued two social bonds (EUR 4bn 30-year and EUR 10bn 7-year) bringing its total social bond issuance to date to EUR 53.5bn since October 2020. The proceeds are used to fund its SURE (Support to mitigate Unemployment Risk) programme. 

Sustainability bonds

In February 2021, Goldman Sachs issued its inaugural sustainability bond of USD 800m 5-year where proceeds will be allocated to clean energy, sustainable transport, sustainable food and agriculture, waste and materials, ecosystem services, accessible and innovative healthcare, accessible and affordable education, financial inclusion, and communities.

In February 2021, Alibaba issued its inaugural sustainability bond of USD 1bn 20-year where the proceeds will mainly be used for green buildings, energy efficiency, Covid-19 crisis response, renewable energy, and circular economy and design. 

Sustainability-linked bonds (SLBs) issuances

In February 2021, the fashion retailer H&M issued a EUR 500m 8.5-year SLB where it committed to: (i) increase the share of recycled materials as inputs to 30% (from 0.5% in 2017), (ii) reduce Scope 1 and 2 emissions by 20 percent, and (iii) reduce (selected) Scope 3 emissions by 10%; all against the 2017 baseline, by 2025.

In January 2021, the UK retailer Tesco issued a EUR 750m 8.5-year SLB where it committed to reduce the Group’s Scope 1 and 2 GHG emissions by 60% by 2025 (vs. 2015 baseline) based on a 25bp step-up mechanism.  

In January 2021, Simpar, a Brazilian logistics and mobility company, issued the inaugural SLB from its business sector, a USD 625m 10-year. The company committed to reduce its GHG emissions (Scope 1, 2, and 3) intensity to 124.04 tCO2e/million R$ Net Revenue by the end of 2025, which represents a 7.8% reduction from the 2019 baseline. If it fails, it will pay a one-time 25bp coupon-step up. 

In January 2021, Klabin, a Brazilian paper company, issued a USD 500m 10-year SLB with SPTs being (i) the reduction of its water consumption by 16.7% (from 2018 baseline); (ii) increase of solid waste reused and recycled to 97.5% (up from 94.3% in 2017); and, (iii) reintroduction to the ecosystem of at least two native animal species – by 2025. It opted for differentiated step-ups for each of these SPTs (i.e. 12.5bp, 6.25bp, 6.25bp, respectively).

In January 2021, Odjfell SE, a Norwegian shipping company, issued the first SLB from the shipping sector. With its NOK 850m 4-year bond, the issuer committed to reach an Average Efficiency Ratio (carbon intensity metric used in shipping) of 8.18 or lower at 30 June 2024, failing which the redemption price will increase by 150bp. 

In January 2021, New World Development, a Hong Kong based real estate company, issued a USD 200m 10-year SLB with the commitment of achieving 100% renewable energy for NWD’s Greater Bay Area rental properties by 2026. In case of failure, the issuer will purchase carbon offsets equivalent to 25bp per annum from 2027 to 2031. 

Other developments in sustainable bond markets

On 14 January 2021, Bank of China priced a transition bond aligned with the newly released Climate Transition Finance Handbook. The issuance came from BOC’s Hong Kong Branch in two tranches (USD 500m 3-year and CNH 1.8bn 2-year).

In January 2021, the Bank for International Settlements (BIS) launched a euro-dominated, open-ended fund for green bond investments for central banks. The launch follows the introduction of a first BIS green bond fund denominated in US dollars in September 2019. Together, the two BIS green bond funds will manage some USD 2bn in green bonds compliant with GBP or CBI and with a minimum rating of A-. 

Following the ECB’s announcement in September 2020, SLBs with coupon structures linked to objective(s) of the EU Taxonomy and/or environmental SDGs have become eligible (subject to other general conditions) as collateral for Eurosystem credit operations and for outright purchases in Eurosystem monetary policy operations as of 1 January 2021. Recently, the ECB also published FAQs which provide further details and requirements for the eligibility of SLBs. We note that SLBs with mixed SPTs consisting of both environmental and social targets are considered not eligible.


Updates from the Executive Committee and the Secretariat

Climate Transition Finance Handbook        
To support the growth of climate transition finance, the market community behind the Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines and Sustainability-Linked Bond Principles launched in December 2020 clear guidelines on the disclosures that should be made by issuers on their climate change strategy when raising funds in debt capital markets. The new Climate Transition Finance Handbook clarifies the information that should be made publicly available to investors in connection with the issuance of ‘use of proceeds’ bonds aligned with the Green and Social Bond Principles or Sustainability Bond Guidelines, or general corporate purpose bonds issued in line with the Sustainability-Linked Bond Principles. The recommended disclosures in this Handbook are based on the work of the Climate Transition Finance Working Group made up of representatives from more than 80 entities participating in the capital markets, under the auspices of the Green and Social Bond Principles Executive Committee. They reference existing climate change disclosure frameworks developed by relevant industry groups, regulatory bodies and the scientific community.

The Climate Transition Finance handbook is now available in Chinese and Japanese. Further translations are in progress and will be published when available.

Sustainability-linked bonds Q&As

The Executive Committee of the Green and Social Bond Principles published on 17 February 2021 new Q&As for sustainability-linked bonds (SLBs). These are designed to promote understanding of this important new financial instrument and its place in an issuer’s overall sustainability strategy, as well as encourage development in this rapidly evolving new market. 

The Q&As support the Sustainability-Linked Bond Principles published by the Green & Social Bond Principles in June 2020 and now available in 21 languages. This publication was made possible thanks to the efforts of the members of the SLB Working Group.

Updated Guidelines for External Reviews

The updated Guidelines for External Reviews published in February 2021 now include recommendations for external reviews related to sustainability-linked bonds. The new provisions in the Guidelines are the result of a collaboration between the SLB Working Group and the external reviewers consulted prior to the publication of this update who have also voluntarily confirmed their alignment with these recommendations.

ICMA Sustainable Bonds Database and related templates

To complete the range of resources designed to enable the SLB market’s growth and promote its transparency, two forms are now available online, the Market Information Template and External Review Form. These forms, based on the same model as those available for green, social and sustainability bonds, allow the issuer to confirm that its bond is aligned with the SLBP and the external reviewer to confirm the scope of its review. It should be highlighted that the Market Information Template contains a section allowing the issuer to evidence   compliance of its SLB with the eligibility requirements of the European Central Bank for its asset purchases and collateral programmes as well. SLB issuers and reviewers are invited to complete the forms which will be made publicly available on the ICMA Sustainable Bonds Database which now also tracks SLB issuances.

Advisory Council

In October 2020, the GBP SBP SLBP Executive Committee announced the 2020/2021 Advisory Council (AC) composition.

The AC will focus on areas where members can provide advice to the GBP SBP SLBP ExCom, often from a regional perspective:

  • AC members’ input to best practice and market instruments such as sustainability-linked bonds and climate transition finance but also GSS bonds and the Principles;
  • Market and regulatory initiatives such as sustainability roadmaps, taxonomies, disclosure; and,
  • Outreach in form of events, podcasts, education.

2020 Annual Consultation (results)

The Executive Committee and the Secretariat organised a conference call open to all Members and Observers on Thursday 17 December 2020. This was an opportunity to present the outcome of the 2020 annual consultation.


The Secretariat welcomes the following organisations which have joined the GBP SBP SLBP membership since the last newsletter published in October 2020: 

Africa Finance Corporation Issuer
ANBIMA Observer
Arthur Cox LLP Observer
Association for Supporting the SDGs for the United Nations (ASD) Observer
Banque Centrale de Compensation (trading as LCH SA) Observer
BNY Mellon Wealth Management Investor
Cardano Group Investor
CDP Worldwide Limited Observer
Commonwealth Bank of Australia Underwriter
european primary placement facility Observer
Islamic Development Bank Issuer
Local Initiatives Support Corporation (LISC) Issuer
Magyar Nemzeti Bank Observer
Ostrum Asset Management Investor
Swedbank Robur Investor
The Governance Group AS Observer
The London Institute of Banking & Finance Observer
The Standard Bank of South Africa Limited Issuer
Vlerick Business School Observer
Volksbank Wien AG Issuer

Please refer to the on-line Members' list to see the full list of 387 GBP SBP Members and Observers.

Regulatory and policy developments


ICMA’s Note on the ESAs’ final recommendations for the RTS of the SFDR
ICMA has issued a note following the publication of the ESAs' final recommendations for the regulatory technical standards (RTS) of the Sustainable Finance Disclosure Regulation (SFDR). The note explains the next steps regarding the decision-making process and points out implementation challenges which members and policy makers may want to consider.

ICMA AMIC workshop on ESG transparency for securitised assets
AMIC held on 17 February a buy-side workshop on ESG transparency for securitised assets. Following this first conversation buy-side participants are now considering (1) publishing a statement highlighting the need for more standardised ESG information for securitised assets and (2) reconvening with originators in order to identify KPIs for auto-loans, RMBS and CLOs.

ICMA’s Response to the Taxonomy draft Delegated Act
On 17 December 2020, ICMA published its response to the draft Delegated Act supplementing the EU Taxonomy Regulation. Overall, ICMA indicated that it believes that while Substantial Contribution and DNSH are recognised as fundamental concepts of the Taxonomy, the Delegated Acts or associated commentary could go further to acknowledge that implementation will take time, even for advanced actors, and that some criteria remain undefined. Further dialogue with the market on usability is desirable to make this a success. The same is true for work needed to establish internationally comparable criteria – something the International Platform could contribute to. Finally, more guidance on the application of the Taxonomy, e.g., how to report investments outside the EU referenced by an EU Green Bond, would be helpful.

Hong Kong

ICMA’s Response to SFC Consultation Paper on Climate risks
SFC launched a consultation on proposed requirements for fund managers to take climate-related risks into consideration in their investment and risk management processes and make appropriate disclosures on 30 October 2020. Supportive of SFC’s approach to introduce regulatory requirements for fund managers, ICMA responded to the consultation, highlighting some challenges faced by fund managers, including climate risk modelling and lack of reliable issuer-level data, and recommends synchronising the effective date of reporting requirements for issuers and fund managers.

Green and Sustainable Finance Strategy
On 17 December 2020, the Green and Sustainable Finance Cross Agency Steering Group released its green and sustainable finance strategy for Hong Kong, setting out six key focus areas and five near-term action points.


Establishment of a sustainable finance expert panel
On 25 December 2020, the Financial Services Agency announced that it will establish the “Expert Panel on Sustainable Finance” and another meeting body under this Expert Panel will discuss the formulation of practical guidelines for issuing social bonds.


Malaysia’s SRI Sukuk and Bond Grant Scheme
On 21 January 2021, SC Malaysia renamed its Green SRI Sukuk Grant Scheme to SRI Sukuk and Bond Grant Scheme. The grant is now applicable to all sukuk issued under the SC’s Sustainable and Responsible Investment (SRI) Sukuk Framework or bonds issued under the ASEAN Green, Social and Sustainability Bond Standards (ASEAN Standards).


Consultation on Singapore’s proposed Green Taxonomy for FIs
On 28 January 2021, Singapore’s Green Finance Industry Taskforce, convened by MAS, published a consultation paper setting out a taxonomy for Singapore-based FIs, to classify activities that can be considered green or transitioning towards green. ICMA is responding to the consultation. The deadline to respond is 11 March 2021. 

Environmental risk management
In December 2020, MAS published its responses to the feedback received on Guidelines on Environmental Risk Management for Asset Managers, Banks, and Insurers. The Green Finance Industry Taskforce issued in January 2021 a handbook on implementing MAS’ Guidelines on Environmental Risk Management.

Expansion of the Sustainable Bond Grant Scheme
In November 2020, MAS expanded the scope of its existing Sustainable Bond Grant Scheme (SBGS) to include sustainability-linked bonds, effective immediately. Beyond grant support for pre-issuance costs which have been covered under SBGS since 2017, the enhanced SBGS will now cover the post-issuance costs of engaging independent sustainability assessment and advisory service providers to obtain external reviews or report for bonds under the scheme.


Thai SEC’s upcoming regulation on SLBs
On 20 November 2020, Thai SEC sought public comments on the proposed amendments and new regulations related to issuance and offer for sale of sustainability-linked bonds. The submission deadline was 21 December 2020. ICMA has provided informal consultation to Thai SEC on these proposed rules.

Sustainability events, podcasts and education



Sustainability-linked bonds webinar: latest publication from GBP ExCom, 25 March.

2021 Green Bond and Social Bond Principles Annual General Meeting, 10 June.

Missed an ICMA event? Watch the recording

ICMA podcast      

La place de la finance dans la transition environnementale, 5 ans après les Accords de Paris
3 February 2021 Cet évènement dressera un panorama des principales initiatives prises par les autorités réglementaires et de contrôle au sujet de la finance durable, telles que le standard européen sur les obligations vertes, la taxonomie verte, ou bien la révision de la directive sur la publication d’informations extra-financières (NFRD).

ICMA podcast  

Climate transition finance: the Asia-Pacific perspective
28 January 2021 Designed for Asia-Pacific issuers and market participants, the event presents ICMA’s new Climate Transition Finance Handbook and discusses practical applications and implications for the region.

ICMA podcast  

Climate transition finance – new guidance for issuers
9 December 2020 The coordinators of the international industry working group of more than 80 capital market stakeholders including banks, issuers, investors and NGOs, who drafted the guidance, present the recommendations and discuss their practical applications of the new Climate Transition Finance Handbook.

ICMA podcast      

IFC’s Green Bond Technical Assistance Programme
Nicholas Pfaff, Head of Sustainable Finance, ICMA speaks to Jean Marie-Masse, Chief Investment Officer, International Finance Corporation (IFC) about their Green Bond Technical Assistance Programme (GP-TAP) which helps the development of the green bond market in emerging countries

ICMA podcast  

The role of the sustainable bond markets in promoting biodiversity
Nicholas Pfaff, Head of Sustainable Finance, ICMA speaks to Margaret Kuhlow, Head of Global Finance Practice at the World Wide Fund for Nature (WWF)  and Elise Calais, Head of Division, Enterprise, the French Ministry for the Ecological and Inclusive Transition about the role of the sustainable bond markets in promoting biodiversity and examples of related projects being financed by green bonds.

ICMA podcast  

Kāinga Ora and sustainable finance in New Zealand
Sam Direen, Treasurer of Kāinga Ora - Homes and Communities, the public housing agency of New Zealand speaks about their experience issuing Wellbeing Bonds aligned with the Green and Social Bond Principles. 

ICMA podcast  

Novartis’ recent sustainability-linked bond – reinforcing its commitment to patient access
Daniel Weiss, Deputy Group Treasurer at Novartis, discusses the recent Novartis Sustainability-Linked Bond (SLB), which was the first SLB with two separate KPIs, one of which was a social KPI.

ICMA podcast  

Mizuho’s sustainability strategy as a group and the first public sustainability-linked bond issued in Japan
Sustainability experts from Mizuho speak to ICMA about the development and outlook of the Japanese ESG related bond market, including a recent landmark sustainability-linked bond transaction in Japan.



Register now!
Introduction to Green, Social and Sustainability (GSS) Bonds - Livestreamed
Live sessions: March 15 and 16, 10.00-13.30 CET
Developed by a combination of leading market practitioners and ICMA’s sustainability experts, this livestreamed course provides a thorough and practical introduction to the essentials of green, social and sustainability bonds (GSS), featuring case studies which illustrate the steps required for making a sustainable bond issue.

The Introduction to GSS bonds is also available online as a self-study option, consisting of 12 narrated video modules complete with concept-checking quizzes, allowing you to complete the course in your own time. Access is provided for six months from date of entry and new intakes are on monthly basis.
Register now to start studying in March.

Be a mentor!

The ICMA Mentoring Platform helps individuals at our member firms to develop their skills by matching those looking for a career mentor with suitable mentors in the international capital market.

There is a ‘green, social and sustainability category’ and we are looking for mentors who can provide career guidance in this flourishing market sector.

Find out more about mentoring through ICMA and sign up to be a mentor.

Sustainable Bonds Helpdesk

Free guidance for members of the International Capital Market Association and for the Green Bond Principles and Social Bond Principles Members and Observers.

  +33 1 70 17 64 70



Contact us

+33 1 70 17 64 70

Twitter   LinkedIn 

Privacy Policy | Contact Us

Please add replies@icmagroup.org to your safe list or address book to make sure our emails reach your inbox correctly.

Your details are shared with MailChimp, our third party mailing platform. MailChimp uses cookies and tracking technology to see whether emails are sent, opened or bounced and whether links are followed. See MailChimp's Cookie Statement

Copyright © 2021 International Capital Market Association (ICMA), Zurich and its licensors. All rights asserted and reserved.

International Capital Market Association (ICMA) | Dreikönigstrasse 8 | CH-8002 Zurich