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Fitch Ratings: Global ESG sukuk up 41% in first half of 2024
Global outstanding ESG sukuk rose by 41% year on years (yoy) to reach $43 billion at end of the first half of 2024(all currencies), according to Fitch Ratings.
Fitch Ratings expects slower issuance in the third quarter of 2024, in line with global sukuk market seasonality, before the markets gain momentum once again in the fourth quarter of 2024.
The medium-term growth potential for ESG debt issuance remains promising, fuelled by governments’ increasing commitment to sustainability and issuers’ aims to meet ESG mandates and funding diversification plans.
However, the ESG debt segment is at a much earlier stage of adoption than in developed markets.
We forecast both lower oil prices (2024F: $80/bbl; 2025F: $70/bbl) and interest rates cuts in 3Q24, which may contribute to a rise in debt, including ESG sukuk, over 4Q24–1Q25.
Almost all (99%) Fitch-rated ESG sukuk is investment-grade. In the first half of 2024, Fitch rated about 90% of the global ESG sukuk issued in hard currency ($26.1 billion; up 50% yoy).
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