S&P Global — 13 February 2025
Daily Update: February 13, 2025
Green Bond Market Momentum May Stall Under Trump Administration
By Nathan Hunt
Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy
The green bond market grew significantly in the US in 2024. Total green bond issuance for real estate investment trusts (REITs) more than doubled compared to 2023. According to an S&P Global Market Intelligence analysis, five REITs issued green bonds in 2024, aggregating $4.25 billion in gross proceeds, or 8.1% of all bonds issued in the sector. REITs regularly use bond markets to raise capital for improvement and investment. Historically, the US has been the second-largest issuer of green bonds by country. In the fourth quarter of 2024, the US issued $17.49 billion of green bonds.
However, this growth may be offset by political headwinds. President Donald Trump has withdrawn the US from the Paris Agreement on climate change and emphasized growth in the oil and gas sectors. As environmental issues are de-emphasized under the Trump administration, some market observers are predicting a chill for green bonds, which fund projects that benefit the environment or climate.
"The new US administration will serve as a headwind for sustainable finance," Mana Nakazora, chief environment, social and governance analyst at BNP Paribas Japan, said in a Jan. 16 report. "We're afraid that the US ESG bond market will shrink further."
Beyond a lack of policy support, another cooling effect for green bonds may be the inflationary impact of planned and announced trade tariffs in the US. Higher tariffs could reignite inflation and slow or even reverse rate reductions. Higher interest rates could create hurdles for bond market issuance growth in general. Green bonds, as a relatively new fixed-income asset category, could be particularly impacted.
While US green bonds may be in position for retrenchment or retreat, China’s green bond market appears poised for growth. In the fourth quarter of 2024, China was the largest issuer of green bonds by country, with issuance exceeding $19.14 billion. This momentum is likely to continue in 2025 due to China’s bid to decarbonize its growing economy and the strength of its government support.
"It's likely that green development will continue to benefit from policy support over the longer term, given China's ambitions to peak carbon and carbon neutralization target, as well as its global importance," Lynn Song, chief economist for Greater China at ING, told S&P Global Market Intelligence.
China accounts for the highest emissions by volume in the world. China has been aiming for its emissions to peak by 2030 and to achieve net-zero by 2060. In the absence of US leadership in the climate arena, Chinese authorities are encouraging alignment with international standards and working to develop and international market for green bonds.
Today is Thursday, February 13, 2025, and here is today’s essential intelligence.
The next edition of the Daily Update will publish Tuesday, February 18.
India’s NITI Aayog Set to Unveil Energy Transition Roadmap by May
India's policy planning body, NITI Aayog, is developing an energy transition roadmap that aims to recommend a multipronged strategy incorporating the perspectives of all stakeholders to achieve net-zero emissions by 2070, Rajnath Ram, the agency's adviser for energy, told S&P Global Commodity Insights on Feb. 10. The planning body is collaborating with interministerial groups to study various aspects of the energy transition through modeling and scenarios, and plans to release the paper titled 'Energy Transition and Assuming Net Zero by 2070' by April or May, according to Ram.
—Read the article from S&P Global Commodity Insights
Beginnings and Blends: S&P 500 Sector Performance in the New Year
No matter how vast the index landscape becomes, sectors remain central to the conversation. From TV studios to trading floors, and around the world, the 11 GICS® sectors are widely recognized and discussed, reflecting their enduring utility as indicators of which way markets and economic winds are blowing. They are also valuable building blocks for tailoring views of the US-domiciled, globally exposed members of the S&P 500®.
—Read the article from S&P Dow Jones Indices
Where Does the IPO Market Go in 2025?
The private equity (PE) market will likely drive IPO volumes higher than 2024, but the strength of the PE market could cap the size of deals brought to the market. It's an interesting dichotomy. S&P Global Market Intelligence published a report indicating the value of PE exits fell to a 5-year low last year — about $392 billion in value — and IPOs only accounted for about 11% of those exits.
—Read the article from S&P Global Market Intelligence
Valentine's Day Goods Dodge US Tariffs — For Now
US imports of roses are dominated by shipments from Colombia, with 55.9% of the 1.69 billion stems imported to the US having been sourced there in 2024, according to S&P Global Market Intelligence data. US imports of chocolates are led by shipments from Mexico and Canada, which represented 68.9% of the US imports worth US$3.33 billion in 2024. Shipments increased by 40.8% year over year in December, partly reflecting higher cocoa prices. The Trump administration’s plans for 25% duties on products from Mexico and Canada were put on hold for 30 days but could return in time for peak consumption in the 2025 winter holiday season.
—Read the article from S&P Global Market Intelligence
No Transition Without Transmission? The Grid Equipment Bottleneck Explained
On this week's episode of Energy Evolution, we lay out why grid equipment has become a bottleneck in the deployment of renewables, and why it takes time to ramp up manufacturing. Andreas Schierenbeck, CEO of equipment provider Hitachi Energy, shares industry perspectives on investment trends and the operational realities of scaling up industrial manufacturing of transformers, while S&P Global Commodity Insights analyst Cormac Gilligan explains why demand for grid infrastructure has outpaced supply.
—Listen and subscribe to the podcast from S&P Global Commodity Insights
A Peek at AI Revolution in Mining: Promise Meets Peril
Since OpenAI LLC's release of the GPT-3 large language model, AI has emerged as one of the most exciting and debated topics within the investor community. The rapid pace of its development — promising significant productivity gains — has captured the attention of financial markets.
—Read the article from S&P Global Market Intelligence
CERAWeek 2025 | Moving Ahead: Energy Strategies for a Complex World (Houston, Texas | March 10-14, 2025)
CERAWeek 2025 will explore how policy shifts, technological breakthroughs and geopolitical dynamics are reshaping the global energy landscape through 14 key themes. Join us March 10-14 in Houston and let’s explore how energy security, policy and AI will transform markets and infrastructure.