Sustainability-linked bond offering set to debut by Border to Coast and associated parties
The global sustainability-linked bond (SLB) market, which has seen a decline in issuance volume recently, is showing signs of potential recovery. This revival is particularly evident in Europe, where key developments and regulatory updates are encouraging more issuers to enter the market.
In line with this trend, Border to Coast, a Leeds-based LGPS pool, has announced plans to launch a new sustainability-linked bond fund next year. The fund aims to offer its partner funds access to various types of debt with a focus on sustainability.
The SLB market has faced a downward trend overall since 2021, with fewer than 10 new issuers debuting SLBs globally in the first half of 2025. This decline can be attributed to macroeconomic factors such as inflation, geopolitical tensions, and trade uncertainties, which have made issuers and investors more cautious. As a result, global Green, Social, and Sustainability (GSS) bond issuance, including SLBs, experienced an approximate 13% year-on-year decline in H1 2025.
However, certain developments indicate a possible recovery for the SLB market. For instance, Slovenia's landmark €1 billion 10-year SLB issuance in June 2025, tied to emissions reduction targets and oversubscribed 6.5 times, represents a significant European sovereign debut that may encourage other European corporates and countries to issue SLBs.
Moreover, updates from the International Capital Market Association (ICMA) in mid-2025 include expanded guidance and illustrative KPI registries for SLBs, aiming to improve transparency, comparability, and investor confidence. These developments may support market recovery and growth.
In order to ensure credibility and impact reporting, Border to Coast has appointed a responsible investment manager who will shape and deliver the pool's approach to verification and impact reporting for green, social, and sustainability bonds. The new role will also assess the credibility of issuer-level sustainability disclosures for the fund.
Europe is on track to be the largest green bond issuer worldwide, with the majority of sustainability-linked debt issuance coming from the continent. According to World Bank data, more than $1trn in sustainability-linked debt had been issued last year.
Border to Coast, currently offering three fixed income funds, allocating to Sterling-denominated Index-Linked Bonds, Investment-Grade Credit, and Multi-asset Credit, will manage the new fund's internal operations. However, the specifics about whether the fund will involve third-party allocations were not disclosed.
As the SLB market continues to evolve, Border to Coast's new fund could play a significant role in boosting volumes and encouraging more issuers to adopt sustainable finance practices. With economic conditions stabilizing and regulatory clarity improving, the potential for growth in the SLB market remains promising.
[1] Room151. (2025, June 25). Border to Coast launches sustainability-linked debt fund. Retrieved from https://www.room151.co.uk/news/border-to-coast-launches-sustainability-linked-debt-fund/
[2] ICMA. (2025, July 15). ICMA publishes updated guidance on sustainability-linked bonds. Retrieved from https://www.icmagroup.org/market-practice/sustainable-finance/sustainability-linked-bonds/
[3] World Bank. (2025, January 1). More than $1 trillion in sustainability-linked debt issued in 2024. Retrieved from https://www.worldbank.org/en/news/press-release/2025/01/01/more-than-1-trillion-in-sustainability-linked-debt-issued-in-2024
- In the context of the global sustainability-linked bond (SLB) market potentially recovering, Border to Coast plans to launch a new sustainability-linked bond fund next year, aiming to provide access to various types of debt with a focus on sustainability, potentially boosting volumes and encouraging more issuers to adopt sustainable finance practices.
- The International Capital Market Association (ICMA) has published updated guidance on sustainability-linked bonds, aiming to improve transparency, comparability, and investor confidence, which could support market recovery and growth, as seen in Europe where key developments and regulatory updates are spurring more issuers to enter the market.
