Raised forecasts for transition investment

In SEB’s latest The Green Bond report, the forecast for transition investment has been significantly raised, to above $600bn in 2023 and to more than $1tr by 2025.

New data for 2022 confirmed the acceleration in transition investment. Global clean energy investments totalled $495bn in 2022, the highest level on record. The new clean energy investments are mainly driven by China’s response to the energy shortages experienced in 2021. China’s investment doubled in 2022 compared with 2021, while investment in Europe and North America still haven’t broken with the past decade’s barely rising trend.

Overall, sustainable financing in 2022, including new labelled bonds and loans reached just under $1.5tr last year, down 12 per cent year-on-year. Globally and in Europe, new issuances of sustainable bonds have declined less than the overall bond market. In the Nordics, the amount issued through sustainable bonds grew last year. Sustainable bonds accounted for a third of corporate bonds (excluding real estate) in Europe and the Nordics in 2022. Furthermore, ESG/SRI labelled fund inflows stalled, although fixed income funds saw inflows return in the second half of last year.

The report also looks at the emerging drivers of the accelerated energy transition in the shape of a geopolitically motivated ‘economic arms race’ – including the EU’s newly announced Green Deal Industrial Plan, and the US IRA.

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