RIYADH: Global bonds issuance is expected to grow by 4.3 percent in 2024, with sustainability-linked instruments contributing between $950 billion and $1.05 trillion to the overall surge. According to a recent report by the credit rating agency S&P Global, green, social, sustainability and sustainability-linked bonds, known as GSSSB, in 2024 could account for 14 percent of the total issuance for the second consecutive year. Additionally, sovereign issuance is expected to increase in 2024, driven by sustainability pledges and third-party support schemes. It is projected that Saudi Arabia and the UAE will continue to dominate the regional green bond market. “After a record year in 2023, we expect sovereign issuance to climb further in 2024, supported by national commitments to sustainability and third-party support schemes,” the report stated. However, it added: “In 2024, with many major central banks nearing the end of their rate-hike cycles, macroeconomic uncertainty and other external factors may hinder the degree to which the GSSSB market expands.” In 2023, the Middle East with 149 percent growth, was one of the fastest-growing regions for GSSSB issuance, as it has more than doubled from 2022, reaching a record $23 billion. “We expect entities in the UAE and Saudi Arabia to remain the largest sources of issuance in the region,” it added. The report also expects the government and large corporations to contribute significantly to achieving sustainability targets and commitments to net-zero carbon emissions. Additionally, it notes a continuing upward trend in the issuance of sustainable sukuk, which are Islamic finance instruments compliant with sustainability principles. This growth is expected to escalate further as issuers respond to increasing investor demand for sustainable investment options and as countries with a strong presence in Islamic finance aim to diminish their carbon footprints. Furthermore, the report stated that high-income countries have historically dominated GSSSB issuance, but other markets may begin to increase their presence in 2024. This suggests that high-income countries in Asia Pacific, Latin America, and the Middle East have increased their share of issuance, which could lay the groundwork for issuers in lower-income nations in these regions to access the GSSSB market.