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Non-financial companies lead in green bonds


Dutch companies are increasingly raising capital by issuing green bonds, new figures from DNB reveal. Non-financial companies in particular issue relatively large amounts of green debt securities: at the end of September 2022, about 14% of bonds issued by these firms were designated as green, compared to 11% a year earlier.

Published: 27 October 2022

Hand met groene obligatie

The total size of the Dutch green bond market stood at €91.5 billion at the end of the third quarter of this year, up 3% from a year earlier. At the same time, the overall bond market contracted by nearly 10% compared to the third quarter of 2021 and stood at €1,997 billion. This was mainly due to rising interest rates.

A quarter (€22.8 billion) of the total amount of green bonds were issued by companies in the real economy, in other words companies that do not operate as part of the public or financial sector. This represents about 14% of the total amount of bonds issued by non-financial companies, putting this sector relatively far ahead of others such as financial holding companies (4%, or €31.9 billion) and the central government (3%, or €11.3 billion). 

Source: DNB statistics

At De Nederlandsche Bank, we independently compile statistics on the Dutch financial sector and economy. This article is based on these statistics. More information on our statistics and all dashboards can be found on our Statistics homepage.

What makes a bond "green"?

Capital raised through green bonds may only be used for initiatives and projects aimed at making the economy more sustainable. When issuing these financial instruments, a company explicitly commits itself to working towards climate goals. This is in contrast to regular bonds, where such limits on expenditure do not apply. Making the economy more sustainable could include, for example, investments aimed at boosting the energy transition and improving water management. There are various standards for green bonds and bodies that certify them, for example the Climate Bond Initiative and the ICMA. The European Union is working on a Green Bond Standard in line with the previously ratified EU taxonomy.

Green bonds are mostly issued by utility and tech companies

Utility companies in particular issue a lot of green debt securities. For instance, grid operator TenneT, which is wholly owned by the Dutch State, has over €12.5 billion worth of green bonds outstanding in the market. Tech giants NXP Semiconductors (€2.0 billion) and Royal Philips (€1.7 billion) are also major issuers of green bonds, with their outstanding debt securities making up a sizable portion of the total.

Efforts to green public debt lag behind other sectors

Compared to other sectors, the central government is lagging behind in issuing green bonds. The Dutch State issued its first green bond in 2019, and it has reopened the bond several times to raise additional capital. Although "green public debt" is growing steadily, it is lower than green financing in other sectors. At the end of September, 3.2% of the Dutch national debt was "green" (€11.3 billion), compared to 4.6% (€91.5 billion) for the total Dutch economy.

Through these issuances, the Dutch State raised more green capital than many other EU countries; only France, Germany and Italy have a larger amount outstanding.

The Netherlands as a green transit country

In terms of amounts, the bulk of green capital is raised by financial holding companies. At the end of September, this sector had about €31.9 billion of green bonds outstanding. These companies usually serve as intra-group lenders, with the money raised often flowing to foreign destinations. For instance, although Enel Finance International and Iberdrola International are major Dutch green bond issuers, they are directly linked to Italian and Spanish utility companies. So although the capital is raised through a company registered in the Netherlands, the final investment - and thus the sustainability boost - generally takes place in another jurisdiction.

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