Bloomberg Green Daily writes:
China is preparing to launch its debut sovereign green bond at a time when the market is stuttering elsewhere, especially in the US where corporate deals have almost ground to a halt.
Green bonds, which raise funds for environmentally-friendly projects, are perhaps finance’s most well-known product designed to accelerate the world’s climate transition. Global issuance mushroomed to around $700 billion last year, from just $41 billion a decade ago.
Yet at the start of 2025, pockets of the market are showing signs of a slowdown. Issuances of green bonds from emerging economies, excluding China, have fallen by about a third to $8 billion in 2025, the slowest start to a year since 2022.
In that context, it’s no coincidence that China has chosen to list its debut green bond in London, given European investors’ continued strong demand for environmental products. A foreign listing also supports China’s ambition of taking a greater role in global climate diplomacy, where the US’s retreat creates space for new alliances.
China’s deal is particularly significant given “European investors’ strong appetite for responsible and green investments and amid global uncertainty in emissions reduction, such as the US withdrawal from the Paris Agreement,” said Sonali Siriwardena, global head of ESG at law firm Simmons & Simmons. It could “provide fresh impetus to the global green transition.”
In the first month of his second term, President Trump pulled the US out of the Paris Agreement, froze funding for green projects, fired staff from agencies that do climate work and targeted agencies’ climate-related programs. That’s fanned Republican leaders’ attacks on investments that try to achieve environmental goals such as cutting emissions.
To be sure, it’s still early in the year and US green bond sales may pick up. What’s more, many firms are still funding projects in the US to improve their efficiency and meet other environmental goals. They’re just doing so outside the green bond market as they look to keep quiet about their climate goals and achievements.