Issuance of green, social, sustainability and sustainability-linked bonds was 10% above 2023. 4,490 notes issued in 2024 were the most ever, thumping the old high of 3,729 set in 2023. Sales of green bonds, the largest category by volume, reached $571 billion, but issuance of controversial sustainability-linked bonds dropped for a third year.

Corporate borrowing climbed by more than a third from 2023 to $7.93tn. While yields for investment-grade US corporate debt is at 5.4% compared with 2.4% three years ago, they are only 0.77 percentage points above government debt, the lowest level in decades. This convinced companies to pull forward bond issuance originally planned for next year.

Investors poured record amounts into global bond funds as they bet on lower interest rates by major central banks and because equities, particularly in the US, have become increasingly expensive. Bond prices increased in summer and dropped at the end of the year on concerns that the pace of global rate cuts will be slower than previously expected.

Nuclear power projects prove too tricky to fund through normal project financing methods. Upfront costs are high and construction is lengthy. If the company set up to construct the project defaulted, a half-built nuclear plant would be pretty worthless as security. The interest lenders would demand for that level of risk would simply make projects unviable.

Germany rejected €18 mln worth of carbon credits after finding “irregularities” in China-based projects that were meant to lower emissions. German companies that funded them were allowed to report lower emissions. Authorities will also prosecute the verification bodies that check the projects. The investigation was triggered by a whistleblower.

The world’s largest commodity trader, paid 450 senior employees a record $6.4bn last year. Volatility in commodity markets brought about by Russia’s full-scale invasion of Ukraine in February 2022 has led to a boom for trading companies. Vitol, along with rivals Trafigura and Gunvor, made a combined $46bn in profits in 2022 and 2023.

Countries in eastern Europe plan to build a dozen new nuclear reactors, with a value of €130 bln, but the question is, who will pay for them. Governments need to step in. EU will likely approve state aid for the next budget cycle 2028-34 by June 2025. But inadequate supply chain, and a shortage of experts and contractors will also slow down the projects.

Concerns over Trump presidency and high interest rates caused a clean energy sell-off in the US. Clean energy stocks have tumbled 28% since July last year. Low valuations have prompted takeovers by buyout groups. New equity raised by energy transition companies in the public markets has also fallen, from $68 bln in 2022 to $33 bln in 2023.

Investors rush to get their hands on the juicy yields in the era of interest rates. The yield spreads between corporate and government bonds have become unusually slender, especially for bonds with longer maturities. Pension funds and insurance companies are more interested in yields in comparison with shares than in spreads.

ESG equity funds suffer net $40bn of outflows in 2024 globally, the first sustained exodus. Over the past 12 months, ESG funds made an 11% return, compared with 21% for conventional stock funds. Scandals such as one at German asset manager DWS also hit investors' appetite. But ESG bond funds have have raked in $22bn this year.

Canadian infrastructure giant Brookfield and the investment fund Temasek are in talks to take over Neoen, in a deal valuing the French company at €6.1bn. Neoen has 8 GW of wind, solar and battery projects up and running or under construction, and 20GW under development. Brookfield is a major renewable developer with a pipeline of about 157GW.

Sustainability-linked bonds (SLBs) impose penalties on borrowers when they fail green goals, but they don't need to invest the money into green projects. Enel missed its 2023 GHG emissions target and will pay €83 mln more on the €10 bln worth of SLBs. It’s the most significant penalty yet in a market whose first bond was issued by Enel in 2019.