Iyer || Sustainable Finance Lead, Asia Energizing Sustainable Bond Markets in Asia ASEAN+3 (the Association of Southeast Asian Nations, China, South Korea, and Japan) can follow Europe’s example and boost sustainable bond markets through public sector engagement • The development of sustainable bond markets in the ASEAN+3 (the Association of Southeast Asian Nations, China, South Korea, and Japan). [...] Sustainable bonds in the ASEAN+3 region The European Investment Bank, the lending arm of the European Union (EU), issued the world’s first green bond in 2007. [...] The development of the sustainable bond markets in the rest of the ASEAN region is widely varied across countries. [...] For example, Malaysia has instituted the SRI Sukuk and Bonds Grant Scheme to reimburse up to 90% of the costs incurred by issuers on independent expert reviews of sustainable sukuk (debt instruments adhering to Islamic banking principles) and green bond issuances under the Malaysian or the ASEAN frameworks and standards. [...] In the United Kingdom, the issuance of green gilts set a notable benchmark in the green bond market, attracting diverse investor interest and resulting in high subscription rates and frequent oversubscription.
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Table of Contents
- Sustainable bonds in the ASEAN3 region 1
- ASEAN3 the Association of Southeast Asian Nations China South Korea and Japan can follow Europes example and boost sustainable bond markets through public sector engagement 1
- Shu Xuan Tan Sustainable Finance Analyst Asia 1
- Ramnath N. Iyer Sustainable Finance Lead Asia 1
- The development of sustainable bond markets in the ASEAN3 the Association of Southeast Asian Nations China South Korea and Japan region is inconsistent and lags behind Europe. 1
- Unlike the conventional bond markets the public sectors involvement in the ASEAN3 sustainable bond markets is significantly limited which has impacted market depth and investor confidence. 1
- Figure 1 Diverging Growth Trends of Conventional and Sustainable Bonds by Outstanding Amount 2
- Figure 2 Steady Growth in ASEAN3 Economies Sustainable Bonds Outstanding 2
- Figure 3 Green Bonds Constitute the Majority of ASEAN3s Sustainable Bonds by Outstanding Value 2
- Figure 4 Sustainability-Linked Bonds SLBs and Transition Bonds Trailed Other Sustainable Bonds in Issuance Value 2
- Table 1 Types of Labeled Bonds 3
- Table 2 Types of Labeled Bonds by Issuance Value 3
- Comparison of the sustainable bond markets in ASEAN3 and Europe 4
- Figure 5 The Largest Bond Issuers in the Region China South Korea and Japan Figure 6 Uneven Development of Sustainable Bond Markets Across ASEAN Countries 4
- Frameworks and taxonomies in ASEAN 4
- Table 3 List of Frameworks and Taxonomies in ASEAN 5
- Defraying and reducing friction costs 5
- Asia needs to accelerate green finance 6
- Figure 7 Sustainable Bond Issuance Mostly Originated from the Private Sector in ASEAN3 in 2023 6
- Figure 8 Lower Public Sector Participation in Emerging Markets 6
- Figure 9 Public Sector Issuance Accelerated the Green Market in the Netherlands 2014 2024 6
- Figure 10 Issuance from French Government Agencies and Sovereign Entities from 45 to 65 6
- Figure 11 Government Agencies Catalyzed Sustainable Bond Market in Germany Figure 12 Substantial Public Issuance of Green Debts in France Germany and the Netherlands 7
- Public sector debt can catalyze ASEAN3 sustainable bond issuance 7
- Concerted policy efforts can help develop sustainable debt markets 8
- About IEEFA 9
- About the Authors 9
- Shu Xuan Tan 9
- Ramnath N. Iyer 9
