Current Trends in the ESG Bond Market

Abstract

The relevance of the research topic is confirmed by the statistics of increasing volumes of responsible investment, the annual improvement of the regulatory framework within the concept of sustainable development, and the reports of the World Economic Forum on critical global risks. In this paper, the author puts forward hypotheses on the interrelation of inflation rates, military expenditures, and dynamics of COVID-19 pandemic diseases with the volume of ESG bonds issue, examining their attractiveness at present, when the leaders of most countries give preference to short-term stability. The research aims to analyze the dynamics of the ESG bond market. The scientific novelty of this research is that the author reveals the correlation of dependence and statistical significance between indicators of green investments and inflationary pressure, military expenditures of countries, and COVID-19 incidence. Moreover, global trends of ESG bonds market development are determined. The research methods include conceptual and empirical research methods, a set of methods of economic and statistical analysis, and the analysis of literary and electronic sources. The research shows a direct rather than inverse correlation between green bonds and military spending. This means that governments are indeed concerned about the environment and the consequences of military action, which offers hope for further positive trends in ESG bond issuance. Additionally, it is found that COVID-19 disease rates have no influence on the dynamics of ESG bond issuance in 2022.