Building a World Top Green and Sustainable Bond Hub

60% 40% Green bond Other GSS+ bond 13 Building a World Top Green and Sustainable Bond Hub Although the dominance of green bonds in the sustainable bond market has gradually reduced with the emergence of diversified instruments and new changes in the market, Crédit Agricole CIB ESG Fixed Income Research’s projection shows that the green bond is expected to be the single most important player in the sustainable bond market still taking up about 60% of the total in 2024 (Figure 6). By the end of 2023, the cumulative GSS+ reached 5.5 trillion US dollars, of which 80% (4.4 trillion US dollars) was aligned with the Climate Bonds Standard. Now, the GSS+ market is the largest source of debt capital finance available for sustainable projects and transition finance. Global Sustainable Bond Market Projection (2024) Figure 6: Green Bond’s Projected Share in the Sustainable Bond Issuance in 2024 (Source: By the research team based on projection by the Crédit Agricole CIB ESG Fixed Income Research) For issuers, bonds can provide low-cost, long-term funds, meeting the demands of green projects. There is great diversity in the sources of bonds through which issuers can reach the rich and multiple international fund pools. In addition, green bond issuance can also lead to higher equity returns around the issuance period when the green bonds are verified or certified. For institutional investors, green bonds connect their institutions with special sustainability- themed investments. Accumulating evidence suggests that green bonds may offer resilience during market downturns, and that green bond indices exhibit a better risk-return trade-off than their conventional bond counterparts. Finally, green bonds receive more government financial support, through subsidies or tax exemption.