UK Green Bonds Market

UK Green Bonds Market Overview:

The UK green bonds market size reached USD 32.7 Billion in 2023. Looking forward, IMARC Group expects the market to reach USD 102.21 Billion by 2032, exhibiting a growth rate (CAGR) of 12.60% during 2024-2032. The market is experiencing strong growth driven by increasing corporate and governmental participation. Issuers are raising funds for renewable energy, energy efficiency, and sustainable transport projects. Investor demand for ESG-focused investments and the government's green finance initiatives, such as green gilts, are fueling the market's expansion further across the UK.

UK Green Bonds Market Trends:

Rising Issuance

The UK green bond market has seen a steady rise in issuance mainly driven by increasing public and private sector involvement in financing sustainable projects. This growth is a result of both government and corporate efforts to meet climate goals and align with the UK’s net-zero commitments. Green bonds are being used to fund renewable energy initiatives, energy efficiency upgrades and sustainable transportation solutions such as electric vehicles and low-carbon infrastructure. Financial institutions, corporations, and local authorities are issuing more bonds to capitalize on investor demand for environmentally friendly investment products. This trend is expected to continue as sustainability becomes a priority for both investors and issuers. According to industry reports, in 2023, global green bond issuance reached $576 billion, with 23% attributed to public sector issuances. The UK aims to achieve net zero emissions by 2050 and has committed to reducing GHG emissions from public sector buildings. Green bonds offer public sector organizations a dedicated source of capital for sustainable projects, potentially lower borrowing costs, and an opportunity to enhance their sustainability credentials.

Increasing Corporate Participation

Corporate participation in the UK green bond market continues to grow as businesses integrate sustainability into their financial strategies. Financial institutions such as banks are issuing green bonds to fund projects that promote renewable energy, sustainable infrastructure, and carbon reduction initiatives. Large corporations in sectors like energy, automotive, and manufacturing are also leveraging green bonds to finance cleaner technologies and lower their environmental footprint. This participation is partly driven by investor demand for ESG-compliant investment opportunities and regulatory pressure to meet the UK's net-zero targets, making green bonds an attractive tool for raising capital sustainably. For instance, in October 2023, Allied Irish Banks (AIB) successfully raised €750m from its fifth green bond issuance, bringing its total green bond issuance to over €4bn in the past three years. AIB's Green Bond Framework aligns with the International Capital Markets Association’s Green Bond Principles, directing capital toward low-carbon and energy-efficient projects, including buildings in the UK and Ireland. The oversubscribed issuance garnered interest exceeding €1.5bn from 109 investors across 19 countries.

UK Green Bonds Market News:

• In July 2024, NatWest Group issued the first Electric Vehicle Green bond, raising €750 million to finance and refinance electric vehicles. The bond aims to support the transition to net zero by providing funding for low emission vehicles. This initiative aligns with NatWest Group's commitment to green, social, and sustainable financing. The bank has previously issued green and social bonds totaling £3.9 billion, which have contributed to avoiding nearly 0.121 million tons of CO2e emissions.
• In November 2023, the UK government announced a £4bn investment to boost the development of green technologies and clean energy as part of the Autumn Statement. This includes a £960m Green Industries Growth Accelerator (GIGA) fund aimed at strengthening supply chains and maximizing global growth opportunities. Additional funding of over £2bn is allocated to support the manufacturing and development of zero emission vehicles, their batteries, and supply chain. Furthermore, £975m will be available for the aerospace sector to support the development of energy-efficient and zero-carbon aircraft technology.

UK Green Bonds Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country level for 2024-2032. Our report has categorized the market based on type and end use.

Type Insights:

• Corporate Bond
• Project Bond
• Asset-backed Security (ABS)
• Supranational
• Sub Sovereign and Agency (SSA) Bond
• Municipal Bond
• Financial Sector Bond
   

The report has provided a detailed breakup and analysis of the market based on the type. This includes corporate bond, project bond, asset-backed security (ABS), supranational, sub sovereign and agency (SSA) bond, municipal bond, and financial sector bond.

End Use Insights:

• Energy/Utility Sector
• Financial Sector and Other Corporates
• Government/Agency/Local
   

A detailed breakup and analysis of the market based on the end use have also been provided in the report. This includes energy/utility sector, financial sector and other corporates, and government/agency/local.

Regional Insights:

• London
• South East
• North West
• East of England
• South West
• Scotland
• West Midlands
• Yorkshire and The Humber
• East Midlands
• Others
   

The report has also provided a comprehensive analysis of all the major regional markets, which include London, South East, North West, East of England, South West, Scotland, West Midlands, Yorkshire and The Humber, East Midlands, and Others.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

UK Green Bonds Market Report Coverage:

Key Questions Answered in This Report:

• How has the UK green bonds market performed so far and how will it perform in the coming years?
• What has been the impact of COVID-19 on the UK green bonds market?
• What is the breakup of the UK green bonds market on the basis of type?
• What is the breakup of the UK green bonds market on the basis of end use?
• What are the various stages in the value chain of the UK green bonds market? 
• What are the key driving factors and challenges in the UK green bonds?
• What is the structure of the UK green bonds market and who are the key players?
• What is the degree of competition in the UK green bonds market? 

 Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the UK green bonds market from 2018-2032.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the UK green bonds market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the UK green bonds industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.