Senior issuance remained at the top for GSS supply (12 transactions / €6.8bn) followed by two transactions each in covered (€1.3bn) and capital format (€0.8bn).

Almost all issuers opted for EUR currency – a trend that has endured for the past three months. Of note, however, was Scotiabank's CHF 200m Green Senior, the issuer's first non-USD GSS bond. Green (€6.1bn across 12 transactions) remains the dominant format, with three transactions (€2.3bn) in social and a sustainability issuance by Mediobanca, a €500m 4NC3 Senior Non-Preferred (SNP), which received impressive 4x o/s. 

GSS/S activity maintained its strong momentum in September with volumes almost twice those observed in August. 2023 year-to-date (YTD) total volume is up 21% year-on-year (YoY), representing >90% of 2022 total volumes.

Green issuance (c. €59bn) represents 79% of GSS/S issuance in 2023 YTD – continuing its longstanding dominance, and remaining in line with the past few years (c.75% for 2020 & 2021 and 85% for 2022). Social issuance accounts for 15% followed by Sustainability (5%), along with a nominal contribution of a Sustainability-Linked Loan Bond (SLLB) (1%) from Nordea.

Issuance has been dominated by Senior issuance, with an equal split between Senior Non-Preferred (36%) and Senior Preferred (36%), followed by Covered (23%), which has proportionally increased YoY, at the expense of GSS capital issuance (5% of 2023 YTD volumes).

• EUR Senior: YTD GSS issuance is €49.9bn (+27% vs 2022 YTD), with total senior supply at €219.8bn (+25%); resulting in a small increase of GSS as a % of total issuance to 23% (2022 YTD: 22%).
• GBP Senior: YTD GSS issuance is £3.5bn (+312% vs 2022 YTD), with total senior supply at £27.1bn (+19%); resulting in an increase of GSS as a % total issuance to 13% (2022 YTD: 4%).
• EUR Covered: YTD GSS issuance is €17.4bn (+5% vs 2022 YTD), with total covered supply at €170.7bn (+2%); resulting in GSS as a % of total issuance to 10%, which is same as 2022 YTD.
• GBP Covered: YTD issuance is nil (2022 YTD: £0.5bn), with total covered supply at £15.9bn (+19%); resulting in GSS as a % of total issuance of nil (2022 YTD: 4%).

• The European Investment Bank (EIB) is providing LBBW a €175 million guarantee to support LBBW renewable energy lending. The synthetic securitisation transaction will free up capital that will then be used to channel €350 million in new financing from LBBW for clean power projects.
• HSBC announced that it plans to provide $1bn of financing to support early-stage climate tech companies. The financing aims to support various solutions, including EV charging, battery storage, sustainable food and agriculture, and carbon removal technologies.
  
• Standard Chartered launched its sustainable trade loan offering for financial institutions. The offering is intended to support the banks financial institution clients by providing liquidity to support the underlying trade flows associated with sustainable development, in areas where it is most needed.
  
• Danske Bank has assessed their lending and investment portfolios to identify the sectors that have the highest potential negative impact on nature and biodiversity. The sectors which were revealed as the highest potential negative impact were: agriculture (including food products and fisheries), forestry, pulp and paper and shipping.
  
• Commerzbank has joined the Partnership for Carbon Accounting Financials (PCAF), where members are committed to reporting carbon emissions associated with credit and investment using a consistent methodology. This follows on from Commerzbank emission reduction targets being validated by Science Based Targets initiative (SBTi) in March of this year.
  
• Allianz announced its first net-zero transition plan which included a commitment to achieve 150% profitable growth in revenues from renewable energy and low-carbon technology solutions in the commercial insurance segment by 2030 versus 2022. Additionally, Allianz outlined its intermediate targets by 2030 to reduce greenhouse gas (GHG) emissions in the Allianz’s own business operations, proprietary investment portfolio and P&C insurance business. 
  

• La Banque Postale, LBP AM and CNP Assurances launched a €1 Billion impact infrastructure debt fund to support the energy transition. The fund is classified as Article 8 under Sustainable Finance Disclosures Regulation (SFDR) and will finance infrastructure projects that make a substantial contribution to mitigating climate change or are committed to decarbonising their operations.
• Morgan Stanley Infrastructure Partners and Crowley announced a joint venture to advance offshore wind energy solutions for the US. The new joint venture will focus on repurposing and operating existing U.S. port facilities and leasing them under long-term contracts to offshore wind developers.

• The Taskforce on Nature-related Disclosures (TNFD) published their final recommendations for nature-related risk management and disclosure. The Recommendations aim to inform better decision making by companies and capital providers, and ultimately contribute to a shift in global financial flows towards nature-positive outcomes and the goals of the Kunming-Montreal Global Biodiversity Framework.
• The FCA has issued a portfolio letter to wholesale banks, setting out its key priorities. The letter identifies several key areas of focus, including ESG, consumer duty, artificial intelligence, and diversity, equity and inclusion.
• European Supervisory Authorities (ESA) published their second annual report on the extent of voluntary disclosure of principal adverse impacts (PAI) under the Article 18 of the SFDR. The results show an overall improvement compared to the previous year however there is still significant variations across disclosures.
  

• MSCI launched the MSCI Sustainability Institute which aims to drive progress on the role of capital markets in creating sustainable value and tackling global challenges such as climate change. The institute has a range of offerings, such as equipping academic researchers and policymakers with sustainability data, metrics and models that investors use to inform their decision-making. 
• Sustainable Fitch launched its ESG Ratings product for investors. The offering provides granular and transparent ESG ratings and sub-scores at an entity, framework and instrument level.
  
• S&P launched its updated Second Party Opinions (SPOs) featuring ‘Shades of Green’. The integrated analysis produces four analytical outputs: alignment assessment, shade of green, issuer sustainability context and EU Taxonomy assessment. 
  

• Caroline Haas, Head of Climate and ESG Capital Markets
• Doug Shuffman CFA, Vice President, Climate and ESG Capital Markets
• Jake Hallam, Vice President, Climate and ESG Capital Markets
• Pulkit Khurana, Associate, Climate and ESG Capital Markets
• Siobhan Wartnaby, Analyst, Climate and ESG Capital Markets

*For further analysis and information on the Primary Market, take a look at the full monthly newsletter on Market Insights. If you do not have access to Market Insights, please contact us here. Also, for any unfamiliar terms used within this article please refer to our insights glossary.

[1] Includes European Bank & Insurance GSS/S Issuance
[2] Source: NatWest Markets Syndicate (04/10/23), includes Global Financial Institutions EUR & GBP Issuance.