Market roundup: Brazil’s ESG-bond boom loses steam

ESG-labeled debt emissions dropped 38 percent in the country last year. But the scenario is less negative than it seems

ESG labeled debt emissions dropped 38 percent in the country last year. But the scenario is less negative than it seems — Photo: Shuttertock

By Ana Ferraz and Fabiane Ziolla Menezes

Feb 25, 2023 9:43 3 min read

What’s happening with the Brazilian ESG debt market?

The emission of ESG bonds in Brazil dropped both in number and value last year after a record 2021. According to a survey by NINT, a consultancy focused on ESG, there were 79 sustainable credit operations totaling BRL 54 billion (USD 10.3 billion) in 2022, a 38-percent drop from the previous 12 months.

Green bonds continued to be the star of the show, representing 70 percent of all bonds issued and more than half of the total amount collected in the year. Social bonds, however, only accounted for 4 percent of operations.

What’s happening. The data show that the national ESG-labeled debt market has been growing rapidly since 2019. At its 2021 peak, the market hit an impressive 121 sustainable credit operations worth BRL 86.6 billion.

The year 2021 was extremely favorable, thanks to low interest rates and high liquidity...