An increasing number of sovereigns are turning to green bonds as a means to raise capital for climate mitigation and adaptation activities. We expect this trend to accelerate.

ESG risks are a key part of Moody's sovereign risk assessments, affecting economic, institutional and fiscal strength and susceptibility to event risks.

The unregulated utilities sector will face growing pressure from the regulatory and technological changes associated with the shift to a low-carbon grid.

Green bond issuance lagged in the first quarter of 2018, compared to the same period in 2017. However, lower than anticipated issuance will be no more than a speed bump for market growth.