亚开行-东盟绿色债券和可持续金融调查：对机构投资者和承销商观点的见解（英）-2022.11-78正式版

SURVEYONGREENBONDSANDSUSTAINABLEFINANCEINASEANINSIGHTSONTHEPERSPECTIVESOFINSTITUTIONALINVESTORSANDUNDERWRITERSNOVEMBER2022SURVEYONGREENBONDSANDSUSTAINABLEFINANCEINASEANINSIGHTSONTHEPERSPECTIVESOFINSTITUTIONALINVESTORSANDUNDERWRITERSNOVEMBER2022Co-publicationoftheAsianDevelopmentBankandtheGlobalGreenGrowthInstitute(GGGI)CreativeCommons CreativeCommonsAttribution-NonCommercial3.0IGOlicense(CCBY-NC3.0IGO)©2022AsianDevelopmentBank;GlobalGreenGrowthInstitute6ADBAvenue,MandaluyongCity,1550MetroManila,PhilippinesTel+63286324444;Fax+63286362444GlobalGreenGrowthInstitute19FJeongdongBldg,21-15Jeongdong-gil,Jung-gu,Seoul,04518,RepublicofKVietNamOffice65VanMieu,DongDaDistrict,HaNoi,VietNamVietnam_Office@Somerightsreserved.Publishedin2022.ISBN978-92-9269-888-1(print);978-92-9269-889-8(electronic);978-92-9269-890-4(ebook)PublicationStockNo.TCS220535-2DOI:/10.22617/TCS220535-2TheviewsexpressedinthispublicationarethoseoftheauthorsanddonotnecessarilyreflecttheviewsandpoliciesoftheAsianDevelopmentBank(ADB)oritsBoardofGovernorsorthegovernmentstheyrepresent,northeviewsandpoliciesoftheGlobalGreenGrowthInstitute(GGGI)oritsSecretariat.ADBandGGGIdonotguaranteetheaccuracyofthedataincludedinthispublicationandacceptnoresponsibilityforanyconsequenceoftheiruse.ThementionofspecificcompaniesorproductsofmanufacturersdoesnotimplythattheyareendorsedorrecommendedbyADBorGGGIinpreferencetoothersofasimilarnaturethatarenotmentioned.Bymakinganydesignationoforreferencetoaparticularterritoryorgeographicarea,orbyusingtheterm“country”inthisdocument,neitherADBnorGGGIintendtomakeanyjudgmentsastothelegalorotherstatusofanyterritoryorarea.ThedesignationsemployedandthepresentationofmaterialinthispublicationdonotimplytheexpressionofanyopinionswhatsoeveronthepartofADBorGGGIconcerningthelegalstatusofanycountry,territory,cityorarea,orofitsauthoritiesorconcerningthedelimitationofitsfrontiersorboundaries.ThisworkisavailableundertheCreativeCommonsAttribution-NonCommercial3.0IGOlicense(CCBY-NC3.0IGO)/licenses/by-nc/3.0/igo/.Byusingthecontentofthispublication,youagreetobeboundbythetermsofthislicense.Forattribution,translations,adaptations,andpermissions,pleasereadtheprovisionsandtermsofuseat/terms-use#openaccess.ThisCClicensedoesnotapplytonon-ADB/GGGIcopyrightmaterialsinthispublication.Ifthematerialisattributedtoanothersource,pleasecontactthecopyrightownerorpublisherofthatsourceforpermissiontoreproduceit.NeitherADBnorGGGIcanbeheldliableforanyclaimsthatariseasaresultofyouruseofthematerial.Pleasecontactpubsmarketing@ifyouhavequestionsorcommentswithrespecttocontent,orifyouwishtoobtaincopyrightpermissionforyourintendedusethatdoesnotfallwithintheseterms,orforpermissiontousetheADBlogo.CorrigendatoADBpublicationsmaybefoundat/publications/corrigenda.Note:ADBrecognizes“HongKong”asHongKong,Chinaand“Vietnam”asVietNam.CoverdesignbyMikeCortes. PrintedonrecycledpaperCONTENTSTable,Figures,andBoxesvForewordviiAcknowledgmentsixAbbreviationsxSummaryandKeyFindingsxiiINTRODUCTION1BackgroundandObjective1Methodologies1OVERVIEWOFTHEASEANSUSTAINABLEBONDMARKET2RECENTINITIATIVESINSUSTAINABLEFINANCE6RegionalInitiatives6NationalInitiatives9Indonesia9Malaysia11Philippines14Singapore17Thailand17VietNam21LaoPeople’sDemocraticRepublic23Cambodia24BruneiDarussalam25SURVEYRESULTS26InstitutionalInvestors26UnderwritersandAdvisors36iv  CONTENTSRECOMMENDATIONS43Theroleofinstitutionalinvestorsinvitalizingsustainablefinancemarket43Strengthenthesupplyofgreenbondsviamarket-basedmechanisms45Establishpolicyguidance,definitions,andguidelinesforsustainabilitydisclosure45Streamlinetheissuanceprocessviacapacitybuildingandothertechnicalassistance46APPENDIX:COUNTRYSCORECARDS49TABLE,FIGURES,ANDBOXESTABLERespondentstotheASEANGreenBondSurveybyCountry26FIGURES1SustainableBondsOutstandinginASEANMarketsbyIssuerType22IssuanceofGreen,Social,andSustainabilityBondsinASEANMarkets33ShareofGreen,Social,andSustainabilityBondsOutstandingbyCountry44IssuanceCurrencyofSustainableBondsOutstanding45CurrencyDenominationofGSSBondsOutstanding56SustainableBondsOutstandingandShareoftheTotalBondMarket57SustainableInformationPlatformWebpage198InterestinInvestinginGreenBonds279OptimalInvestmentSize2710MostPromisingSectorsforGreenBondInvestments2811MainObstaclesPreventingInvestmentinGreenBonds2812PolicyMechanismsThatWouldIncreaseGreenBondInvestments2913KeyMotivationsforInvestinginGreenBonds3014KeyConsiderationsforInvestinginGreenBonds3315InterestinIssuingGreenBonds3616OptimalIssuanceSize3717SectorsThatAreMostPromisingSectorsforGreenBondsIssuance3718KeyObstaclesforIssuingGreenBonds3819KeyDriversforGreenBondIssuances3820KeyMotivationsforIssuingGreenBonds39vvi  TABLE,FIGURES,ANDBOXESBOXES1UNDPAssistanceintheIndonesianGreenSukukandSDGBondMarket102RAMSustainability—SupportingClimateIntegrityintheGreenBondMarket13throughClimateBondsStandardVerification3TheAsianDevelopmentBank’sJourneyintoGreenBondsandBlueLoansinThailand444GGGISupportforVietNam’sInauguralOnshoreInternationallyVerifiedGreenBond47FOREWORDThefinancialmarketsofthe10membercountriesoftheAssociationofSoutheastAsianNations(ASEAN)areacriticalenginetosupporttheirtransitiontoagreeneconomyforthebenefitoftheirmorethan650millioninhabitants.Whiletheregionisdirectlyexposedtotheimpactofclimatechange,itisalsoinhugeneedofadditionalcapitalinflowstosupportthebuildingofresilientinfrastructureprojectstoaccompanythetransitiontohigh-incomelevelsofdevelopment.Untilnow,domesticbankingsystemshaveprovidedthenecessarycapitalforthefinancingofpublicandprivateprojects,whilethedevelopmentofactivedebtcapitalmarketsgenerallyremainsinanearlystageofdevelopmentdespitesomerealprogressinsomeASEANmembers.Theattractivenessoftheregiontoinvestorsisbuiltonstrongfoundationsincludinggoodcreditqualityandmoderatecountryrisk,thepresenceofpowerfulbankinginstitutions,aswellasanemerging,yetactive,sustainablefinancemarket.Theopportunitytoattractnewcapitalflowshasincreasedinthelastdecadewiththeemergenceofthematicfinance.Therapidgrowthofgreen,social,andsustainability(GSS)bondmarketsgloballyhasseenthevolumeofoutstandingGSSbondsrisetoUSD3.3trillionattheendofJune2022,accordingtotheClimateBondsInitiative.TheGSSbondmarketisbuiltonsolidprinciplessuchastheSustainableBondGuidelinesoftheInternationalCapitalMarketAssociationandtheASEANGreen,Social,andSustainabilityBondStandards.RegulatorsacrossASEANhaveactivelypromotedstrongrulesandguidelinestoensurethatthematicinstrumentsarerecognizedbyglobalinvestorsasadheringtothestrongestrulesandavoiding“greenwashing.”Theseinitiativeshavecreatedthefoundationsforstronggrowthinmarket-basedfinancingthatwillcomplementpubliccapitalinvestedbyASEANmembers’centralandlocalgovernments,aswellasdevelopmentinstitutionssuchastheAsianDevelopmentBank(ADB)andtheGlobalGreenGrowthInstitute(GGGI).Yet,despitetheseearlyachievements,manymarketsintheregionstilllackthedepthandliquiditythatcanbeseeninmorematuremarketselsewhere.InreviewingtheresultsofasurveyconductedamongkeystakeholdersacrossASEANmarkets,thisreportseekstohighlightthesentimentsthatexistamonginstitutionalinvestors,underwriters,andissuersonthetopicofthematicinstruments.Throughdirectaccesstothemainlocalplayersinthesemarkets,ADBandtheGGGIarehelpingtobetterunderstandtherealityofthisemergingbondmarketsegment.ADBisalsocollaboratingcloselywithASEANmembers,thePeople’sRepublicofChina,Japan,andtheRepublicofKorea—collectivelyknownasASEAN+3—topromotethedevelopmentoflocalcurrencybondmarketsandregionalbondmarketintegrationthroughtheAsianBondMarketsInitiative(ABMI).TheABMIistheonlyplatformestablishedbyASEAN+3governmentstobolstertheresilienceoftheregion’sfinancialsystembydevelopinglocalcurrencybondmarketsasanalternativetoforeign-currency-denominated,short-termbankloansforlong-terminvestmentfinancing.viiviii  FOREWORDGGGIisatreaty-basedinternational,intergovernmentalorganizationdedicatedtosupportingandpromotingstrong,inclusive,andsustainableeconomicgrowthindevelopingcountriesandemergingeconomies.InVietNam,GGGIhasbeenworkingwiththecentralgovernmenttosupportthetransitiontogreengrowthandtoaddressclimatechangebypromotingsustainableinfrastructure,acceleratinggreendigitalsolutions,andincreasingaccesstoinnovativefinancialinstrumentssuchasgreenbonds.TheVietNamGreenBondReadinessProgramisamongtheflagshipprogramsofGGGIinVietNam.ThisstudywasconductedbytheABMI—withgenerousfinancialsupportfromtheGovernmentofthePeople’sRepublicofChinathroughitsPovertyReductionandRegionalCooperationFund—inclosepartnershipwiththeVietNamGreenBondReadinessProgram,aprogramfundedbytheGovernmentofLuxembourgandfacilitatedbyVietNam’sMinistryofFinance.AlbertFrancisPark AchalaAbeysingheChiefEconomistandDirectorGeneral Director–AsiaEconomicResearchandRegional GreenGrowthPlanning&ImplementationDivision CooperationDepartment GlobalGreenGrowthInstituteAsianDevelopmentBankACKNOWLEDGMENTSThisreportwasjointlypreparedbytheAsianDevelopmentBank(ADB)andtheGlobalGreenGrowthInstitute(GGGI).Theteam—ledbyKosintrPuongsophol,financialsectorspecialist,EconomicResearchandRegionalCooperationDepartment(ERCD),ADBandSrinathKomarina,programmanager,GGGI—comprisedCedricRimaud,OthMarulouGagni,AlitaLestor,ShuTian,RoselynRegalado,andRussJasonNgLo,allfromERCD,ADB;aswellasHienTran,ThinhTran,MinhTran,andHaNguyen,allfromGGGIVietNamoffice.TheteamwouldliketothankSatoruYamadera,advisor,ERCD,ADBandJasonLee,MekongSubregionalrepresentativeandVietNamcountryrepresentative,ADBfortheiroverallguidance,support,andcontributions.WewouldalsoliketothankDonghyunPark,economicadvisor(strategicknowledgeinitiatives),ERCDforreviewingthereport.EditingbyKevinDonahue.DesignandlayoutbyEdithCreus.Finally,wewouldliketoexpressourheartfeltgratitudetoalltheregulatoryauthorities,industryassociations,localstakeholders,contributors,aswellastoallrespondentsfromtheAssociationofSoutheastAsianNations,fortheirassistancewithandparticipationinthesurvey.ixABBREVIATIONSABMI ASEAN+3AsianBondMarketsInitiativeABMIF ASEAN+3MulticurrencyBondIssuanceFrameworkACGF ASEANCatalyticGreenFinanceFacilityACMF ASEANCapitalMarketsForumADB AsianDevelopmentBankASEAN AssociationofSoutheastAsianNationsASEAN+3 ASEANplusthePeople’sRepublicofChina,Japan,andtheRepublicofKoreaABC AssociationofBanksinCambodiaBIS BankforInternationalSettlementsBNM BankNegaraMalaysiaBOT BankofThailandBSP BangkoSentralngPilipinasCSFP CambodiaSustainableFinancePrinciplesEPF EmployeesProvidentFundESG environmental,social,andgovernanceGGGI GlobalGreenGrowthInstituteIDR IndonesianrupiahJC3 JointCommitteeonClimateChangexABBREVIATIONS   xiLaoPDRLCYLSCOMASMYRNBCNGFSOICOJKPLCSCSCMSECSETSDGSLBSRITATFCDTHBUSDVND

LaoPeople’sDemocraticRepubliclocalcurrencyLaoSecuritiesCommissionOfficeMonetaryAuthorityofSingaporeMalaysianringgitNationalBankofCambodiaNetworkofCentralBanksandSupervisorsforGreeningtheFinancialSystemOfficeoftheInsuranceCommissionOtoritasJasaKeuangan(IndonesiaFinancialServicesAuthority)publiclylistedcompaniesSecuritiesCommissionSecuritiesCommissionMalaysiaSecuritiesandExchangeCommissionStockExchangeofThailandSustainableDevelopmentGoalsustainability-linkedbondSustainableandResponsibleInvestmenttechnicalassistanceTaskForceonClimate-RelatedFinancialDisclosuresThaibahtUnitedStatesdollarVietnamesedongSUMMARYANDKEYFINDINGSSURVEYHIGHLIGHTSSurveyswereconductedfromNovember2021toJune2022acrossseveralAssociationofSoutheastAsianNations(ASEAN)membersviaanonlineplatform,receivingatotalof314responsesfrominstitutionalinvestors—pensionfunds,assetmanagementcompanies,commercialbanks,andinsurancecompanies—and96responsesfromunderwriters,advisors,andsecuritiesissuers.GiventhedifferentlevelsofcapitalmarketdevelopmentinASEAN,respondents(investorsandunderwriters)fromcountrieswithmoredevelopedcapitalmarketsaremorepreparedtoinvestandunderwritegreenbondsthanthosefromcountrieswithlessdevelopedcapitalmarkets.DevelopmentpartnerssuchastheAsianDevelopmentBankandtheGlobalGreenGrowthInstitutecanplayacrucialroleinassistinginterestedentitieswithtechnicalassistanceandcapacitybuilding,particularlythosefromlessdevelopedcountries.ThemajorityofASEANinvestorsstillprefersmallticketsizes,whileunderwritersarekeenertoworkonbiggertransactions.AcrossmostASEANcountries,renewableenergy,energyefficiency,andcleantransportationareviewedasthemostpromisinggrowthsectorsintheregion’sgreenbondmarket.Themajorityofrespondentsbelievedthatgreenbondissuanceandinvestmentsoffernodistinctadvantagesoverconventionalbonds.Thissentimentistheprimaryobstacletomarketexpansion.Respondentswerealsooptimisticthattaxincentivescouldbeaneffectivemeansofincreasingthesupplyofanddemandforgreenbonds.Wheninvestingingreenbonds,themajorityofinvestorsseekportfoliodiversificationopportunities,whilethemajorityofissuersseektoattractnewinvestors.GreenbondsalsoprovideopportunitiestointegratetheSustainableDevelopmentGoals(SDGs)intoinvestmentstrategiesandbusinessoperations,whichcancontributetoanorganization’sgreenerimage.xiiSUMMARYANDKEYFINDINGS   xiiiThegreenbondmarketinASEANhasalreadyshownpromisingsignsofgrowingstronglywiththepotentialtoexpandfurther.ThemajorityofinstitutionalinvestorsandunderwritersareinterestedingreenbondsandintakingthenecessaryactionstoeitherincreasetheirgreenportfolioorunderwritemoregreenbondsissuedbyASEAN-basedfinancialandnonfinancialcorporations.Investorsprefersmallerticketsizes,whereasunderwritersprefermuchlargerdealsizes.ThemajorityofinvestorsprefersmalltransactionalinvestmentsizesofUSD10millionorless.Fewerthan20%ofrespondentsindicatedanoptimalinvestmentsizeofbetweenUSD51millionandUSD100million,andevenfewerindicatedanoptimalinvestmentsizeofmorethanUSD100million.LargerticketsizesarepreferredbyinvestorsinmoredevelopedmarketssuchasSingapore.However,thevastmajorityofunderwritersprefertoworkonbondswithlargerissuancesizes,typicallyrangingfromUSD11milliontoUSD50million.Notably,allunderwritersintheSingaporemarketfavorablyviewtheopportunityofunderwritingdealsofmorethanUSD100million,whereasonlyabout60%ofThaiunderwriterrespondentspreferissuancesofmorethanUSD100million.Renewableenergyisconsideredthemostpromisinggrowthsectorinmostcountries.ThemajorityofrespondentsagreethatrenewableenergyisoneofASEAN’smostpromisingindustries,bothintermsofinvestmentandtheissuanceofgreenbonds.Certaincountrieshaveaspecificinterestinparticularindustries,suchaswastemanagementinMalaysia,watermanagementinVietNam,sustainableagricultureintheLaoPeople’sDemocraticRepublic,andcleantransportationinThailand.Thelackofdistinctadvantagesoverconventionalbondshindersmarketgrowth.ThemajorityofinvestorsstatedthatthelackofclearadvantagesofgreenbondsoverconventionalbondswasaconcernsharedbyallASEANmembers.AccordingtothemajorityofinvestorsfrommoredevelopedcountriessuchasMalaysia,Singapore,andThailand,theinsufficientgreenbondsupplyisthegreatestobstacle.Thisdemonstrateslocalinstitutionalinvestors’interestinadditionalgreenbondinvestmentopportunities.However,sincetherearenoclearbenefitstoissuinggreenbonds,themajorityofunderwritersagreedthattheirclientsarelesslikelytodoso.Inmoredevelopedmarkets—particularlyMalaysia,Singapore,andThailand—thelackofeligiblegreenprojectsappearstobeanotherbarrier.Thismaybeduetoalackofknowledgeandawarenessregardingtheidentificationofeligibleprojectsthatmeetinternationalstandards.InmorenascentmarketslikeCambodiaandVietNam,investorsagreedthathavingacleartaxonomyordefinitionforgreenassetswouldbeverybeneficialbecauseitwouldreassureinvestorsthattheyareinvestinginassetsthatadheretodefinitionsestablishedbydomesticregulatorsandarealignedwithinternationalpractices.Taxincentivescanbetheprimarymechanismtoincreasethesupplyofanddemandforgreenbonds.Themajorityofinvestorsfromallcountriesindicatedthattaxincentivesarethemostimportantfactorinattractingmoreinvestorstogreenbondmarkets.Inaddition,cleargreendefinitionsdevelopedand/orendorsedbyregulators,aswellasotherpolicysupportfromlocalregulators,areessentialformainstreamingclimatefinanceinASEAN.Similarly,underwritersindicatedthattaxincentivesforissuersareoneofthemostimportantfactorsforincreasingtheissuanceofgreenbonds.Investordemandisanotherimportantfactortoconsider,asthemajorityofissuersindicatedtheywouldbewillingtospendtheadditionaltimeandresourcesneededtoissuegreenbondsiftheycouldattractnewinvestors.xiv  SUMMARYANDKEYFINDINGSPortfoliodiversification,animprovedgreenimage,andtheintegrationofSDGsintoinvestmentpoliciesareamongthekeymotivationsforinvestingingreenbonds.Mostrespondentsindicatedthatinvestingingreenbondswouldenablethemtodiversifytheirportfolio,improvetheirorganization’sgreenimage,andincorporatetheSDGsintotheirinvestmentstrategy.Inaddition,investorsconsiderthevaluationandpricingofgreenbonds,creditratings,andcompanyprofilestobethemostimportantfactorswhenmakinginvestments.MalaysianandSingaporeanrespondentsalsocitedenvironmental,social,andgovernanceimpactsasoneoftheirprimaryconsiderations.Fromissuers’pointofview,theopportunitytoattractnewinvestorsandthepossibilityoflowerfundingcostsarethetwomostimportantfactorsindecidingwhethertoissuegreenbonds.RespondentsfromBruneiDarussalam,Cambodia,Indonesia,Singapore,andThailandconsidertheopportunitytolowerfundingcoststobethemostcrucialfactorinmakingissuancedecisions.Malaysianrespondentsindicatedthatimprovingtheirclients’greenimageisthemostimportantfactor.INTRODUCTIONBackgroundandObjectiveTheAsianDevelopmentBank(ADB)andtheGlobalGreenGrowthInstitute(GGGI)jointlyconductedaregionalsurveyineachAssociationofSoutheastAsianNations(ASEAN)membereconomytoassesslocalinstitutionalinvestors’interestingreenbondsaswellastheperspectivesoflocalarrangersandunderwritersontheirclients’interestingreenbondissuance.Thesurveyaimedtoidentifymarketdrivers,impediments,anddevelopmentprioritiesforASEAN’ssustainablefinancemarkettoassistdevelopmentpartnersinidentifyingpotentialareasofsupporttoacceleratethegreenbondmarket’sdevelopmentintheregion.ADBiscollaboratingcloselywithASEANmembers,thePeople’sRepublicofChina,Japan,andtheRepublicofKorea—collectivelyknownasASEAN+3—topromotethedevelopmentoflocalcurrency(LCY)bondmarketsandregionalbondmarketintegrationthroughtheAsianBondMarketsInitiative(ABMI).TheABMIwasestablishedin2002tobolstertheresilienceofASEAN+3financialsystemsbydevelopingLCYbondmarketsasanalternativesourcetoforeigncurrency-denominated,short-termbankloansforlong-terminvestmentfinancing.ADB,asSecretariatfortheABMI,isimplementingaregionaltechnicalassistance(TA)program,financiallysupportedbythePeople’sRepublicofChinaPovertyReductionandRegional

CooperationFund,topromotesustainableLCYbondmarketdevelopment.ThisTAwasdevelopedandisbeingimplementedwithguidancefromASEAN+3financeministersandcentralbankgovernors,inaccordancewiththeABMIMedium-TermRoadMapfor2019–2022.GGGIisworkingwithVietNam’sMinistryofFinanceandotherkeypublicandprivatestakeholdersontheVietNamGreenBondReadinessProgram,whichisfundedbytheGovernmentofLuxembourg.Thismultiyearprogramaimstosupportthelong-termdevelopmentofagreenbondmarketinVietNamthrough(i)anenhancedregulatoryframework,improvedcapacitiesandknowledgeamongVietnamesegovernmentofficialsandmarketparticipantswithregardtogreenbondissuance,and(iii)increasedgreeninvestmentthroughpilotissuances.MethodologiesFromNovember2021toJune2022,ADBandGGGIconductedasurveyinseveralASEANcountriesviaanonlineplatformandreceivedatotalof314responsesfrominstitutionalinvestors—pensionfunds,assetmanagementcompanies,commercialbanks,andinsurancecompanies—and96responsesfromunderwriters,advisors,andsecuritiesissuers.1OVERVIEWOFTHEASEANSUSTAINABLEBONDMARKETSince2017,theASEANsustainablebondmarkethasgrownsignificantly,thankstothecommitmentoftheregion’sgovernmentsandregulatoryauthorities.AsaresultoftheintroductionoftheASEANGreenBondStandardsin2017andtheASEANSocialandSustainabilityBondStandardsin2018,whichprovidedthemarketwithguidanceandclarityregardingwhatconstitutesgreenandsocialactivities,themarkethasexpandedsignificantly.AttheendofJune2022,thecumulativeoutstandingamountofgreen,social,andsustainability(GSS)bondsinASEANexceeded

USD35billion,upfromUSD30billionayearearlier,withcorporateissuancesleadingtheway.Additionally,sovereignissuanceshavegrownsignificantlyasmoreASEANcountriesissueGSSbondsandsukuk(Islamicbonds).IndonesiawasthefirstASEANcountrytoissueasovereigngreensukukin2018andhassinceissuedgreenbondsandsukukregularlyinboththeoffshoreandonshoremarkets.Thailand(sustainabilitybondin2020),Malaysia(sustainabilitysukukin2021),thePhilippines(sustainabilitybondin2022),andmostrecentlySingapore(greenbondin2022),havealsoissuedGSSbonds(Figure1).Figure1:SustainableBondsOutstandinginASEANMarketsbyIssuerTypeUSDmillion

,,,,,,,, JunDevelopmentBankFinancialCorporateGovernment-BackedEntityNonfinancialCorporateSovereignsSource:AsianBondsOnlinecomputationsbasedonBloombergLPdata.2OVERVIEWOFTHEASEANSUSTAINABLEBONDMARKET   3GreenbondsarethemostcommontypeofsustainablebondinASEANmarkets,followedbysustainabilitybonds,whichstartedtogrowinearnestin2018beforeexpandingevenmorerapidlyin2019.ByJune2022,theshareofsustainabilitybondissuanceexceededgreenbondissuanceforthefirsttimeinASEAN.Meanwhile,socialbondscontinuetoaccountforaverysmallshareofthematicbondsoutstanding.Therearesomesignsthatotherformsofthematicissuance,suchassustainability-linkedbonds(SLBs)andtransitionbonds,willgainimportanceinthefuture,asinvestorslooktodiversifytheirportfoliosandincludedifferenttypesofexposurefromtheindustrialandothertraditionalsectors(Figure2).Intermsofcountrybreakdown,themajorityofissuersfromIndonesiaandSingaporehaveissuedgreenbonds,whilesustainabilitybondsaremoredominantinMalaysia,thePhilippines,andThailand.Asdiscussedearlier,themarketshareofsocialbondsisinsignificantinASEAN

markets;issuersinThailandarethemostlikelytooffertheseinstruments(Figure3).InVietNam,thebondmarketremainsconcentratedingreenloans.Onegreenandonesustainablebondwereissuedoffshorein2021.ThemajorityofGSSbondsfromASEANissuersaredenominatedinforeigncurrency—thatis,acurrencyotherthananASEANmember’sdomesticcurrency.Thisindicatesthatforeigncapitalplaysasignificantroleinsupportingissuers’investmentsandexpendituresthatcontributepositivelytoenvironmentalandsocialdevelopment(Figure4).ThisisevidentinIndonesia,thePhilippines,andVietNam,wherethevastmajorityofbondsaredenominatedinforeigncurrency.Incontrast,themajorityofbondsfromMalaysian,Singaporean,andThaiissuersaredenominatedintheirrespectivelocalcurrencies.InThailand,nearlyallGSSbondsoutstandingasofJune2022wereissuedinThaibaht(Figure5).Figure2:IssuanceofGreen,Social,andSustainabilityBondsinASEANMarketsUSDmillion

,,,,,,,,-JunGreenbondsSocialbondsSustainabilitybondsSustainability-linkedbondsSource:AsianBondsOnlinecomputationsbasedonBloombergLPdata.4  SURVEYONGREENBONDSANDSUSTAINABLEFINANCEINASEANFigure3:ShareofGreen,Social,andSustainabilityBondsOutstandingbyCountryIndonesiaMalaysiaPhilippinesSingaporeThailandGreenbondsSocialbondsSustainabilitybondsSustainability-linkedbondsSource:AsianBondsOnlinecomputationsbasedonBloombergLPdata.Figure4:IssuanceCurrencyofSustainableBondsOutstanding JunFCYLCYFCY=foreigncurrency,LCY=localcurrency.Source:AsianBondsOnlinecomputationsbasedonBloombergLPdata.OVERVIEWOFTHEASEANSUSTAINABLEBONDMARKET   5Despiterecentgrowth,theshareofGSSbondsremainsextremelysmallcomparedtothesizeofthetotalASEANbondmarket.Onaverage,theGSSb