There was a total of 53 deals recorded in 2024, up 56% year over year, marking a \u201crobust recovery\u201d for the market after issuance declined for two consecutive years.<\/p>\n
Green bonds accounted for the bulk (82.5%) of total issuance in Canada. As the report describes, green bonds are dedicated to exclusively financing projects that deliver identifiable environmental benefits. The next largest category was sustainability bonds (11.3%), followed by sustainability-linked bonds (3.4%) and social bonds (2.7%). The umbrella term for these financial instruments is sustainable or GSS+ bonds.<\/p>\n
Global GSS+ bond issuance was also up in 2024, rising 11.3% year over year to $1.1 trillion.<\/p>\n
What are these bonds financing?<\/p>\n
The report provided a breakdown of where Canadian GSS+ bond proceeds were allocated in 2024.<\/p>\n
Clean energy accounted for 43% of total disclosed proceeds. This was followed by clean transportation (27%), green buildings (10%), energy efficiency (4%), water and wastewater management (3%) and multi-category projects (3%).<\/p>\n
The remainder of proceeds was directed to essential services, natural resources, social housing and climate adaptation, which each accounted for 1-2% of total use-of-proceed allocations.<\/p>\n
Ultimately, the report said these allocations underscored \u201cthe market\u2019s focus on climate mitigation over adaptation.\u201d<\/p>\n
Where Canada stands globally<\/p>\n
Canada represented a 2.4% global share of sustainable bond issuance in 2024 and roughly 2% of the cumulative global issuance to date, the report noted.<\/p>\n
However, Canada still pales in comparison to the U.S., whose total green bond issuance is four times greater.<\/p>\n
\u201cThe U.S. continued to dominate global issuance despite ongoing ESG backlash in that country, followed by Germany, China and France,\u201d the report said.<\/p>\n
Also, Canada\u2019s rebound last year was in line with a broader trend in North America. In 2024, sustainable bond issuance across the continent increased by 60%, with green bonds making up the bulk of the total issuance amount, the report noted.<\/p>\n
Recommended measures to spur further growth<\/p>\n
To accelerate the growth of Canada\u2019s sustainable bond market and increase its share of the global market, the ISF made a series of recommendations in the report.<\/p>\n
This includes advancing voluntary sustainable investment guidelines, otherwise known as a taxonomy, to provide policy certainty; mandating standardized reporting and assurance for proceeds allocation and impact; and expanding sovereign and sub-sovereign issuance.<\/p>\n
It also recommends developing a centralized sustainable bond database and boosting issuer and investor literacy to \u201cbroaden participation, particularly among smaller municipalities, Indigenous organizations, and small and mid-sized businesses.\u201d<\/p>\n
\u201cTogether, these measures can help strengthen Canada\u2019s position in sustainable finance, close existing policy and data gaps and unlock capital for the transition to a low-carbon, competitive economy,\u201d the report said.<\/p>\n