New bond offering announced by Border to Coast, with a focus on sustainability-linked bonds
The global market for sustainability-linked bonds (SLBs) is witnessing significant growth, extending beyond Europe and showing strong momentum in Asia. According to recent data, the total outstanding volume of green, social, sustainability, and sustainability-linked bonds (GSS+) aligned with recognized climate methodologies has surpassed USD 6 trillion worldwide, with more than USD 1 trillion added in the past year alone[1].
One of the key growth areas outside Europe is China, which saw a resurgence in its SLB market in 2024 following a stagnant 2023. The country issued USD 7.1 billion across 82 deals, up from USD 5.7 billion in 2023, making it the third-largest global SLB issuer cumulatively with USD 22.7 billion issued[3]. The focus of these bonds has shifted towards social and sustainability issues, with volumes surging by 316% to USD 15.7 billion in 2024, primarily supporting affordable infrastructure, healthcare, education, and employment[3].
The Guangdong-Hong Kong-Macao Greater Bay Area (GBA) is also emerging as a regional powerhouse for sustainable finance, accounting for 11% of China’s GDP but boasting a significant surge in aligned GSS+ bond issuances valued at USD 69.5 billion from 2022-2024[3]. Hong Kong has been leading issuance in the region.
In wider global markets, the SLB market is undergoing increased scrutiny, particularly concerning the credibility of targets. European players remain influential, but the market slowdown in early 2025 suggests a phase of refinement where investors demand more transparent and robust sustainability performance frameworks[4]. New rating tools like ISS’ Sustainability Bond Rating (SBR), launched in 2025, are aiding investors in assessing and comparing the environmental and social impact of GSSS bonds, including SLBs[2]. This contributes to market maturity across regions.
Meanwhile, Border to Coast, a Leeds-headquartered LGPS pool, is planning to launch a new sustainability-linked bond fund next year. The pool is looking to hire a responsible investment manager to help shape and deliver its sustainability-linked bond fund strategy. The new role will also involve monitoring of third-party verification providers. The details regarding the management structure of the fund are yet to be disclosed, and it remains unclear whether the fund will be internally managed or involve allocations to third-party funds. The new fund aims to provide partner funds with access to green, social, and sustainability debt.
In conclusion, beyond Europe, the global SLB market is robustly growing, with Asia—especially China and Hong Kong—as dynamic centers of issuance and innovation. The market is entering a stage where credibility, alignment with science-based criteria, and investor scrutiny are intensifying, driving more sophisticated structures and ratings globally[1][2][3][4].
- In Asia, countries like China and Hong Kong are showing strong business growth and innovation in the finance sector, particularly with sustainability-linked bonds (SLBs), contributing significantly to the global SLB market.
- Investors are increasingly focusing on the credibility of targets and transparency in sustainability performance frameworks, which is driving the evolution of rating tools like the ISS' Sustainability Bond Rating (SBR) to assess and compare the environmental and social impact of green, social, and sustainability bonds, enhancing the maturity of the SLB market across regions.
