The Growth of ESG Bonds in India
The growing importance of ESG or environmental, social and governance(in corporate boardrooms) in India is now also being reflected in the capital-raising plans of India Inc, with Indian companies raising almost $5 billion through ESG bonds so far in 2021, higher than the amount raised in any of the previous years.
Indian companies raised $4.94 billion through ESG bonds, including green bonds, with the largest contribution coming from green bonds raised by renewable energy producers such as Greenko, ReNew Power and JSW Hydro Energy, according to data from financial markets tracker Refinitiv.
that tapped the ESG bond market also include Shriram Transport Finance, which raised funds through social bonds; Adani Electricity Mumbai Ltd and UltraTech Cement Ltd, which issued sustainability-linked bonds.
Globally, too, ESG bond offerings have been seeing a sharp rise, as such concerns have taken centre stage following the coronavirus outbreak.
Global issuance of green, social and sustainability bonds, collectively also known as sustainable bonds, is expected to hit $850 billion in 2021, a new annual record and a 59% jump from 2020, Moodyâ€™s Investors Service said in a report on Thursday.
Industry experts believe that while there is not much of aor such bonds, as more and more dedicated pools of capital are set up for ESG investments, a pricing benefit may emerge for companies that go the ESG way. The global issuance of sustainable bonds in the second quarter jumped 66% from a year earlier to $189 billion, s said. This consisted of $94 billion green bonds, $46 billion social bonds and a quarterly record $49 billion sustainability bonds. The quarterly issuance total was the third-highest on record, indicating that market momentum is still exceptionally strong, the rating agency said.