Green Gilts

Green gilt issuance

At his ‘Future of the UK Financial Services Sector’ speech in Parliament on 9 November 2020, the Chancellor of the Exchequer announced that: "to meet growing investor demand, the UK will, subject to market conditions, issue our first ever Sovereign Green Bond next year [2021]. This will be the first in a series of new issuances, as we look to build out a "green curve" over the coming years, to help fund projects to tackle climate change, finance much-needed infrastructure investment, and create jobs across the country". It was announced at the Budget on 3 March 2021 that the government planned to issue its first sovereign green bond – or green gilt – in summer 2021, with a further issuance to follow later in 2021 as the UK looked to build out a "green yield curve".

The UK Government’s Green Financing Framework was published on 30 June 2021. The Framework details the types of expenditures that will be financed by green gilt issuance to help meet the government's green objectives, and also commits the government to reporting on the social co-benefits, such as job creation, arising from these expenditures.

The inaugural 12-year green gilt was launched via syndication on Tuesday 21 September 2021. A second green gilt (a new 32-year maturity) was launched on Thursday 21 October 2021, also via syndication. Green gilt issuance for the financial year 2021-22 raised a total of £16.1 billion (cash).

Green gilt issuance for the financial year 2022-23 raised a total of £9.9 billion (cash) across five transactions in May, September and November 2022 and February 2023 (two transactions). The focus was on re-opening the existing medium and long maturity green gilts, in order to build up liquidity.

 
Green gilt issuance of £10.0 billion (cash) is planned in financial year 2023-24. The focus for this financial year has been on further re-openings of the two existing green gilts launched in 2021 in order to help build them towards benchmark size.

 
The first ‘UK Green Financing Allocation Report’ was published on 26 September 2022. The second allocation report and inaugural impact report, referred to as the ‘UK Green Financing Allocation and Impact Report’ was published on 28 September 2023.

 
Documentation relating to green gilt transactions can be found below and in the Publications section of the DMO’s website.