by The Green Bond Market refers to bonds issued by corporations and government entities to finance environmentally friendly projects like renewable energy, biodiversity conservation, pollution prevention, climate change adaptation and circular economy. Green bonds help address issues of climate change by channeling funds towards projects with environmental benefits. They offer investors exposure to projects that generate positive environmental impact alongside financial returns. The market for green bonds has grown significantly over the years as more governments and companies seek to transition towards a low-carbon economy and meet global climate targets.
The global Green Bond Market is estimated to be valued at US$ 479.06 Bn in 2023 and is expected to exhibit a CAGR of 8.5% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends driving growth in the green bond market is the increasing investments being made in renewable energy projects globally. As fossil fuels deplete and concerns over climate change mount, there is a pressing need to transition towards cleaner sources of energy. Green bonds provide a source of funding for large scale projects in solar, wind, hydropower and other renewable sources of energy. Strong policy support in the form of carbon pricing mechanisms and subsidies have also boosted investments in renewable energy infrastructure development. This, coupled with falling technology costs is expected to sustain the high issuance of green bonds for financing low carbon projects over the coming years.
Porter’s Analysis
Threat of new entrants: The green bond market has low threat of new entrants due to high initial investment required for issuance and certifying bonds as green.
Bargaining power of buyers: Institutional and corporate investors have moderate bargaining power in the green bond market by investing in projects aligned with ESG goals.
Bargaining power of suppliers: Issuers have low to moderate bargaining power due to growing investor demand for funds to finance green projects.
Threat of new substitutes: Alternatives like traditional bonds pose low threat due to investors’ increasing preference for ethical investments supporting climate change mitigation.
Competitive rivalry: Intense as issuers compete for limited pool of ‘green investors’ by improving project disclosures and certifications.
Key Takeaways
The global Green Bond Market Growth is expected to witness high growth supported by increasing commitments for low carbon investments.
Regional analysis:
Europe dominates the green bond market with over 50% share led by heavy issuance from France, Germany and Sweden. Asia Pacific is the fastest growing region due to supportive policies in China, India and Japan directing funds to renewable energy and green infrastructure.
Key players:
Key players operating in the green bond market are Zimmer Biomet, Smith & Nephew, Stryker, DePuy Synthes, Orthofix, Bioventus LLC, DJO Global, Braun, Medtronic, Globus Medical. They are focused on issuance of certified green bonds to finance sustainable hospitals, medical waste management and recycling projects aligned with their ESG goals.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
