Sustainable bond issuance in the Middle East is down from the same period a year earlier, and could require acceleration in implementing net zero polices to really take off, despite government initiatives and increasing alignment with sustainability strategies, or even regulatory requirement, according to a report released yesterday by S&P Global Ratings.
In the report entitled "Sustainability Insights: Middle East Sustainable Bond Insurance Trends", S&P Global Ratings said total sustainable bond issuance in the Middle East reached $16.7bn in the first nine months of 2024, down 18% from the same period a year earlier, although this followed a relatively high COP28 halo effect.
"The demand for sustainable bond issuance in the region is sensitive to economic growth, inflation, and interest rates, while transparency and disclosure within ESG reporting are in the early stages of development; these factors could affect funding and regulations," said S&P Global analyst Ms Rawan Oueidat in the report.
The UAE and Saudi Arabia will likely continue to lead the region's Sustainable Bonds issuances, despite increased activity elsewhere.
Sustainability bonds lead the share of issuance, as more banks fuel issuances, with almost muted activity for corporates. "Renewable energy remains a key priority in the region, with most issuances including it as part of the use of proceeds," Ms Oueidat added.