October 2020

This edition covers:

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


State of the labelled bond market with a focus on Social and Green Bonds (contributed by SEB)

While COVID-19 related issuance was the main focus in the first half of the year, green bonds are now regaining their momentum. The market performed remarkably well in September with new issuances totalling USD 58.7bn. This is the highest monthly volume ever recorded, and it was in great part due to landmark sovereign issuances from the German Federal Government and the Kingdom of Sweden, as well as the auto industry - Daimler, Volkswagen and Volvo entering the green bond market. Moreover, the EU announced its strategic use of the green bond market to re-activate the economy through a stunning Euro 220+bn issuance.

Source: SEB analysis based on Bloomberg and SEB data

There is once more a strong momentum behind the green bond market, and we expect this year’s growth to be in line with the growth seen throughout previous years. On the back of this, we expect both the auto sector, Germany and the EU to remain strong drivers for growth throughout 2021. 

At the moment the market is still behind the pace envisioned by SEB’s Organic Evolution Scenario and Green Growth Scenario, which it has been for most of the year due to COVID-19, but the gap is now smaller, and with the acceleration of issuance, we expect that it can be filled.

The structure of labelled bonds has enabled a dialogue with investors on how investments can be used to target recovery measures in light of the pandemic, in particular in respect to health, essential infrastructure like energy, water and food supply and re-activation financing. This dialogue has made it possible to fast track more than USD 100bn of COVID-19 action related financing. At SEB, we see this as the seal of approval for issuance protocols required to label a bond. Social and sustainability bonds continue to grow and the total for the full year is almost twice the amount issued under these labels in the first three quarters of 2019. 


The social bond market is dominated by agencies and supranationals, while the sustainability bond market is dominated by corporations and financial institutions.

Furthermore, the labelled bond-issuance program which the EU is about to launch will see the union emerge as one of the largest issuers of top-rated debt by the end of next year. It starts with social bonds (called EU SURE bonds) of up to €100 billion. These bonds will be used to reduce the social impact of COVID-19 to and will be aligned with the Social Bond Principles.

As a natural consequence, we expect political decision makers to continue collaborating with the investment community in engaging finance and refining the requirements for ensuring the societal value of financing as a whole. We expect this process to evolve gradually over the next 3 to 5 years with for example the key input of the Network of Central Banks and Supervisors for Greening the Financial System (NGFS) and the Principles for Responsible Investment (PRI).

Definitions supporting what should be done, such as a taxonomy or reference points, are likely to be (and should be) a result of an ongoing dialogue to allow both political consensus and the inclusion of future technological solutions. The strategy discussions we are currently having with investors reflect this thinking. In these discussions, transition is very much a topic of focus – a transition which is likely to be financed through labelled bonds, e.g. sustainability-linked bonds or use of proceeds bonds linked to transition strategy. 

We need to look forward and encourage collaboration across society as we face stability risks. So, expect issuance from all sectors and stay alert to the labels.

Sustainability-linked bonds from an external reviewer’s perspective (contributed by Sustainalytics)

While issuances of existing instruments in the sustainable bond market continue to grow, the market continuously innovates to address additional needs. The most recent innovation is sustainability-linked bonds (SLBs), with the Sustainability Linked Bond Principles (SLBP), administered by ICMA, released in June 2020, following the first publicly traded SLB by ENEL in September 2019. 

SLBs are forward-looking performance-based instruments and, in contrast to green and social bonds, can be used for general purposes rather than having predefined eligibility criteria for the use of proceeds. The key feature of SLBs is that the bond’s structural or financial characteristics (e.g. coupon rate) are linked to the achievement of pre-determined Sustainability Performance Targets (SPTs). The SPTs chosen should be ambitious and relate to material and relevant KPIs of the issuer. The SLBP’s emphasis on materiality and ambitiousness means that assessments of alignment with the SLBP must consider holistically the issuer’s overall sustainability issues and focus more on the issuer’s overall business model and past performance than do the GBP/SBP. For the assessment of ambitiousness of the SPTs, the clarity of KPIs and the comparability of the issuer’s KPIs and business model with peers, external benchmarks and past performance data are of particular importance. 

While the market is still in its infancy, the emphasis on the sustainability strategy rather than specific project categories is likely to open the market for new sectors and companies. Despite the SLBP being released only recently, we already see strong interest in SLBs by the market. 

Sustainalytics provided the Second Party Opinion for Novartis’ Sustainability Linked Notes, issued in September 2020, which tied the notes’ coupon rate to the achievement of two social performance targets related to patient reach in low middle income countries through the company’s (i) strategic innovative therapies and (ii) global flagship programme. Sustainalytics assessed the bond as overall aligned with the SLBP, because, among other reasons, we considered the SPTs to be ambitious and patient reach, as an indicator for access to medicine, to be a relevant and material sustainability issue for Novartis. 

The issuance was distinct from other SLBs issued to date in that it focussed on social SPTs. Other issuances have so far focused on the environmental performance of issuers. In addition, the assessment of the SPT’s ambitiousness focussed mainly on the relation of the SPTs to Novartis’ past performance and the strategy to achieve the SPTs. This focus was due to significant differences amongst Novartis’ peers in business models that determine strategies and performances on access to medicine and the absence of external benchmarks for access to medicine.

Sustainable bond market highlights

Green Bonds

In August, Visa Inc. issued its inaugural green bond (USD 500mn 7-year) where the use of proceeds (UoP) include upgrades to buildings, energy efficiency improvements, expanded usage of renewable energy sources, water efficiency projects, employee commuter programs, and research and initiatives focused on sustainable consumer behaviours.

In September, Germany issued its inaugural green bond (EUR 6.5bn 10-year) based on an original twin bond concept and with UoPs mainly targeting budgetary expenditures on clean transportation and intangible assets such as international cooperation to fight climate change. Also in September, Sweden entered the market with a SEK 20bn 10-year bond (USD equivalent of 2.28 bn) with UoPs focusing on clean transportation among others. Later in the month, Egypt issued its inaugural green bond of USD 750mm 5-year. 

Volkswagen AG issued its inaugural green bonds of EUR 2bn (8-year and 12-year); Volvo Cars issued a EUR 500mn 7-year; and Daimler issued EUR 1bn 10-year, all in September and mainly focused on clean transportation as UoPs.

Social and Sustainability Bonds

In August, Alphabet joined the sustainable debt market with the largest sustainability bond ever issued by a corporate, a USD 5.75bn (in three tranches with maturities of 5-year, 10-year, and 30-year). The proceeds are marked for energy efficiency (especially for its data centres) and COVID-19 crisis response, among others.

In September, CADES, a French public agency in charge of repaying French social security debt, issued a social bond of EUR 5bn, 10-year, where the proceeds will be used to (re)finance the French social security deficit.

Sustainability-linked Bonds (SLB)

In September, Suzano, the Brazilian pulp and paper company, issued a USD 750mn 11-year SLB linked to reaching a carbon intensity of 0.190t CO2t/ton in production (by the end of 2025) with a 25bp step-up mechanism.

In September, Novartis issued a EUR 1.85bn 8-year SLB which is linked to the achievement of its social targets (ie 2025 Patient Access Targets) by 2025 with a 25bp step-up mechanism.

In September, the luxury firm Chanel issued a EUR 600mn 6-year and 11-year SLB linked to the decrease of its Scope 1, 2 and 3 emissions and renewable electricity for own operations.

EU-related developments

On 16 September 2020, the European Commission President Ursula von der Leyen announced that 30% of the EUR 750bn package for the Next Generation EU budget will be raised through green bonds. It was also indicated that 37% of the funding will be invested in the European Green Deal objectives. Previously in June, the European Stability Mechanism (ESM) announced that it was getting ready to issue social bonds to fund the Pandemic Crisis Support credit lines. The ESM published its Social Bond Framework aligned with the Social Bond Principles. The use of proceeds relates exclusively to financing of direct and indirect healthcare, cure, and prevention-related costs.

On 22 September 2020, the European Central Bank announced that sustainability-linked bonds will become eligible as collateral for Eurosystem credit operations and also for Eurosystem outright purchases for monetary policy purposes, provided they comply with all other eligibility criteria. The coupons must be linked to a performance target referring to one or more of the environmental objectives set out in the EU Taxonomy Regulation and/or to one or more of the United Nations Sustainable Development Goals relating to climate change or environmental degradation. The decision will apply from 1 January 2021.

On 20 October 2020, the European Commission issued a EUR 17bn (10bn 10-year and 7bn 20-year), the largest social bond to date. There was very strong investor interest in this highly rated instrument, and the bonds were more than 13 times oversubscribed. As background, on 7 October 2020, the European Commission announced that it would issue its forthcoming EU SURE bonds of up to EUR 100bn as social bonds aligned with the SBP. The funds raised will be transferred to the beneficiary Member States in the form of loans to help them cover the costs directly related to the financing of national short-time work schemes and similar measures as a response to the pandemic. Alongside the announcement, the Commission also published its EU Sure Social Bond Framework and the second party opinion that confirms the alignment with the SBP.


Updates from the Executive Committee and the Secretariat

Advisory Council

The Executive Committee announced earlier in October the 2020/2021 Advisory Council (AC) composition.

The Executive Committee with the support of the Secretariat selected the maximum of 40 organisations out of the 83 applications received. This selection was made after a full review based on criteria detailed in the AC Terms of Reference, notably key stakeholder status and the need for rotation, as well as wide geographic and diverse category representation.

This Council is designed to advise the GBP SBP SLBP Executive Committee, to increase its market awareness and outreach, and to enable further engagement with specific membership categories and observers.

Advisory Council (AC) composition 2020/2021:

ASEAN Capital Markets Forum (ACMF)
Ashurst LLP
Aviva Investors PLC
Bank of China Limited
BBVA, Banco Bilbao Vizcaya Argentaria, S.A.
Bloomberg LP
Bundesrepublik Deutschland- Finanzagentur GmbH
Caisse Française de Financement Local (CAFFIL) 
CICERO Shades of Green Ltd
Clifford Chance LLP
Daiwa Securities Co.Ltd.
Enel S.p.A.
Ernst & Young Hua Ming LLP
Export Development Canada
Fannie Mae
Ferrovie Dello Stato Italiane S.p.A.
Financial Services Agency of Japan
Impact Investment Exchange Pte. Ltd.
Institutional Shareholder Services Inc. (ISS)
International Institute of Green Finance of
Central University of Finance and Economics
Latham & Watkins LLP
London Stock Exchange 
Luxembourg Stock Exchange
Morgan Stanley
National Australia Bank
Nordea Bank Abp
RAM Sustainability Sdn Bhd
Rating and Investment Information, Inc.
S&P Global Ratings 
State Street Global Advisors
Stockholm Sustainable Finance Centre
The Carbon Trust
The Climate Bonds Initiative 
UBS AG London Branch
United Nations Development Program
Wells Fargo Asset Management
World Wide Fund for Nature (WWF)

2020 Annual consultation (open until 13 November 2020)

As every year now, the GBP SBP SLBP Executive Committee is consulting the Members and Observers on key topics that will guide its priorities for the coming months and which may lead to an update of the Principles. 
This year, the headline themes relate to:

  • Governance, Communication and Outreach
  • Green Bonds & Sustainability-Linked Bonds
  • Impact Reporting
  • Guidance Handbook & Helpdesk

Members and Observers can download the consultation form here. Once completed, it should be sent back to the Secretariat before Friday 13 November 2020, COB.

Working Groups

For 2020/2021, the Executive Committee has decided to maintain the below working groups:

Climate Transition Finance Green Projects Eligibility
Impact Reporting Research
Social Bonds Sustainability-Linked bonds

Should Members or Observers wish to get involved, please contact the ICMA Secretariat. In order to keep the groups relevant and manageable in terms of size, the involvement of new participants is subject to adequate contributions of expertise and the operational capacity of the group.


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

Banco FICO de Carbono LTDA Observer
BDO ITALIA S.p.A Observer
Bureau Veritas UK Limited Observer
Center for Climate Finance Observer
Center for Public Policy Development – ESPOL Polytechnic University – ESPAE School of Management Observer
DBS Bank Ltd. Underwriter
Ernst & Young Hua Ming LLP Observer
Herbert Smith Freehills LLP Observer
HSBC Global Asset Management (GAM) Investor
Instituto Embaixada Do Clima Observer
PeaceStartup Foundation Observer
Sustainable Finance Institute ASIA LIMITED Observer
UN Women Observer

Please refer to the on-line Members' list to see the full list of 370 GBP SBP Members and Observers.

Sustainability-Linked Bond Principles translations

In order to raise further awareness of the recently launched Sustainability-Linked Bond Principles and to encourage issuance and local adoption of SLBs, the SLBP have been translated into the following languages: Arabic, Bahasa Malay, Chinese, Danish, Dutch (Netherlands), Finnish, German, Hausa (Nigeria), Italian, Japanese, Norwegian, Portuguese, Romanian, Russian, Spanish and Swedish. Additional translations will be made available in the coming months (French, Greek and Turkish).

Regulatory and policy developments


European Commission’s Platform on Sustainable Finance
On 1 October 2020, ICMA was selected by the European Commission to be one of the 50 members of the Platform on Sustainable Finance. As background, on 18 June 2020, the European Commission had launched a call for applications for its newly established Platform on Sustainable Finance that will take over from the preceding TEG, where ICMA has been an active member. The platform will be an advisory body composed of members from the private and public sector. Its main mandate will be assisting the EC in the further development of the EU Taxonomy.

EU GBS consultation
ICMA worked on the EC consultation on the EU Green Bond Standard (deadline 2 October 2020). The response was submitted primarily on behalf of the GBP SBP Executive Committee, but it also included input from the SFC channelling comments from ICMA’s other key constituencies.


Green Bond Endorsed Project Catalogue (2020) consultation
The Green Bond Endorsed Project Catalogue (2020 Edition) drafted by the People’s Bank of China (PBOC), the National Development and Reform Commission (NDRC), and the China Securities Regulatory Commission (CSRC) was open for consultation from 8 July to 6 August 2020. For details and implications, please refer to ICMA’s podcast on China’s new Green Bond Catalogue with Prof. Yao Wang, Deputy Secretary General of China’s Green Finance Committee and the article by Judy Li, Ernst & Young in the ICMA Quarterly Report (p. 54).

PBOC to quarterly review banks’ green finance performance
On 21 July 2020, PBOC published the consultation draft of the Framework of Evaluating Green Finance Performance of Banks (in Chinese). The framework builds on the 2018 version and expands the evaluation scope from green loans to the wider concept of green finance, covering green loans and bonds while leaving room to include other green businesses in the future. PBOC will score banks based on quantitative metrics related to green loan and green bond holdings, as well as implementation progress of macro green finance policies and banks’ own green finance strategy. PBOC will incorporate the evaluation results into the Macro Prudential Assessment of the banks. 

NAFMII ranking of green note investors
To promote investment in green bonds, the National Association of Financial Market Institutional Investors (NAFMII) published on 24 September 2020 a ranking of top green note investors by investment amount in the product type Green Debt Financing Instruments. 

Hong Kong

White Paper on Green and Sustainable Banking
On June 30, HKMA published the White Paper on Green and Sustainable Banking. The white paper aims at discussing the initial thinking of the HKMA about its supervisory approach to addressing climate-related issues, and to a lesser extent, broader sustainability issues.


Updated Green Finance Action Plan
MAS launched the updated Green Finance Action Plan on 13 October 2020, highlighting four key thrusts and progress made.

South Korea

Korea’s Green Finance Task Force
Korea FSC held the kick-off meeting for the Green Finance Task Force on 13 August 2020. The task force will work to establish a monitoring system for financial risks emanating from climate change, boost investment in green industries and consider the possibility of joining international networks on green finance.


Taiwan’s Green Finance Action Plan 2.0
On 18 August 2020, Taiwan FSC published its Green Finance Action Plan 2.0 (in Chinese). It sets short-term and mid-term goals, as well as 38 specific measures guided by 3 core strategies and 8 promotion directions.

Sustainability events, education and ICMA podcast episodes


ICMA Asset Management and Investors Council virtual event: Sustainable finance: Taking stock of regulatory developments, market trends and investors' needs
Registration for this event is now closed but a recording will be made available on the ICMA website in the coming days.
23 October 2020 10.00-11.00 BST | 11.00-12.00 CEST | Time Zone Converter
AMIC’s panel discussion for asset managers and investors will look at the main policy developments on sustainable finance in Europe and other jurisdictions, how they will impact asset managers and explore policy options looking forward.

ICMA and JSDA Annual Green & Social Bonds Conference: Developments in Bond Markets Contributing to Sustainability under COVID-19 – Globally and in Japan
13 November 2020 16:00-17:40 Japan Standard Time | 08.00-09.40 CET | Time Zone Converter
Online Platform: Zoom | Location: Tokyo
Focus on recent developments in bond markets contributing to sustainable development globally and in Japan, as well as how the pandemic has changed the market. Looking at whether or not the dramatic increase in social and sustainability bond issuance, driven by COVID-19, will continue in the long term and how  bond markets support global sustainable economic recovery.

Missed an ICMA event? Watch the recording

21 October
ASEAN Sustainable Capital Markets: Regulators’ perspectives

14 October
A new dawn for US corporates and investors in the global sustainable bond markets?

22 September
Green recovery in Asia-Pacific and the role of capital markets


Register now!
Introduction to Green, Social and Sustainability (GSS) Bonds - Livestreamed
Live sessions: November 26 and 27, 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.

From 1 December, 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. Register now to start in December.

Recent ICMA Podcast episodes

Shades of green in the bond market: Christa Clapp, co-founder of Cicero Shades of Green talks to ICMA’s Head of Sustainable Finance, Nicholas Pfaff about the evolving role of external reviewers in giving transparency to investors in green, social and sustainability bonds and new sustainability linked bonds, as well as the future EU Green Bond Standard.

China’s new Green Bond Catalogue: ICMA speaks to Prof. Yao Wang, Deputy Secretary General of China’s Green Finance Committee and Director General of the International Institute of Green Finance. Prof. Wang shares her insights into the consultation draft of the Green Bond Endorsed Project Catalogue (2020 version) released in early July, the major revisions proposed and its potential impacts.

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.

Green Bond Principles and Social Bond Principles 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



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