Sustainability-linked bonds – a large part of the financial industry’s arsenal in the war on fossil fuel usage – are failing to hit their mark. Not least, says the head of think-tank Anthropocene Fixed Income Institute (AFII), because traders have not appreciated how the products should trade.

In 2023, issuance for bonds with coupons linked to social or green performance indicators fell to roughly $60 billion from more than $100 billion just two years earlier, according to the non-profit Climate