UK plays central role in green debt market

The UK is playing a central role in the growing global market for bonds that are specifically earmarked to raise money for climate or environmental projects.

With their first two green gilts the UK government raised £16bn in the third quarter of this year, which represented 19.1% of the global issuance of green debt.

There were £84m worth of green bonds raised in the third quarter of 2021.

As of 29 September, this contributed to a global green debt issuance of $375bn (£276bn) in the year-to-date.

Globally, the UK government’s first green gilt (£10bn) was the largest bond raised in the third quarter.

At the time, Julia Hoggett, chief executive of the London Stock Exchange (LSE), said: “The government’s green financing framework is a positive step towards building a sustainable net-zero UK economy, and funding innovation and job creation across the UK’s growing green industries. Public capital markets are key to mobilising investment in sustainable activities that serve to mitigate social and environmental risk.”

In June, the government also announced the launch of the UK infrastructure bank, with initial funding of £22bn to support green infrastructure spending in the UK.

In the private market, the LSE has issued a ‘green classification’ to help companies that address environmental objectives raise money.

More than 100 issuers now meet the LSE’s green criteria, accounting for more than £140bn in market capitalisation.