China is proud of its green bond market — one of the world’s largest. Only 9% of respondents regard it as needing improvement, while a full 70% say it is ‘well developed’ or ‘very well developed’.
Investors are slightly less wholeheartedly enthusiastic than issuers, though, as would be expected, support is stronger among investors that buy bonds.
Moreover, when asked to say how effective seven aspects of green and sustainable finance are, investors give their highest marks to the green bond market — ahead of official measures and guidance, as well as the sustainability commitments of banks, companies and investors.
Issuers are even more enthusiastic. Only 7% consider the green bond market to need improvement, while 72% say it is well developed, against 69% for investors.
This high standing clearly feeds in to issuers’ willingness to issue green and sustainable debt: two thirds say they will consider this. Moreover, of the third who will not or are unsure, 60% say they do not need to raise new debt. This suggests more than 80% of eligible issuers are willing to use this form of financing. The major objections to green bonds among eligible issuers are related: a lack of financial incentives and a perception of this form of debt as too expensive.
More than a third of issuers also fear that they lack the expertise to issue green bonds, while nearly a quarter say it would involve disclosing too much information.