AFME is pleased to circulate its European ESG Finance quarterly data report for the second quarter of 2024. The report provides detailed data and analysis on the growing Sustainable Finance market in Europe.

The report also gives an overview of the near-term regulatory initiatives in the sector.

Among the main findings of this report:

• ESG bond and loan issuance decelerates during Q2'24 after record first quarter:
  • ESG bond and loan issuance totalled €158bn, a 14% decrease from Q2 2023 (YoY) and a 31% decrease from Q1 2024 (QoQ)
  • With the exception of ESG securitisation, all other sustainable instruments covered in this report exhibited a quarterly issuance decline
  • Sustainability-linked bonds continued a further decline on a quarterly and Year-to-date basis. The cumulative amount issued the first half of the year is the lowest observed since 2020.
  • German issuers led in Q1 2024 by total ESG bond and loan issuance, closely followed by French issuers. Notably, c. 50% of sustainability-linked bonds was originated in Italy and a half of ESG bonds were issued in France or Germany.

• The share of ESG bonds in total bond issuance in Europe has plateaued, or even decreased since 2021:
  • ESG bond issuance, including ESG-labelled, sustainability-linked and transition bonds, represented 13% of total European bond issuance during 2024 YtD, a lower proportion from 14% in 2023 and 18% in 2022.
  • On a year-to-date basis, European green bonds reached the highest H1 issued amount on records. However, relative to the total European bond issued amount, its proportion has continued at c10% since 2021.

• Declining pool of ESG Assets Under Management (AuM) notwithstanding net quarterly inflows:
  • Lower asset prices led to a 1.7% decrease (QoQ) in global ESG funds, reaching a total amount of $USD 9.7tn despite quarterly net inflows for $USD 37.5 bn.