Hi. This is Matt Brundage here at Bridgehouse. I'm speaking with Steve Liberatore, who is the Head of ESG/Impact, Global Fixed Income at Nuveen and the portfolio manager for the Nuveen Global Green Bond Fund. Steve, great to speak with you again. Thanks for having me, Matt. Steve, can you help our viewers better understand exactly what green bonds are, and the significance of them as a growing asset class?
Absolutely. So a green bond is an example of a use of proceeds security, where in this particular case, the proceeds of the transaction are utilized for an environmental outcome. So think of buying a bond that is issued to fund the development of a solar power project or a hydroelectric facility, and they have continued to grow pretty rapidly. They are part of what we consider the broader sustainability labeled bond market, which has exceeded $4 trillion of issuance on its way to 5 trillion.
And we expect this year to have another record year of issuance. And it's a way to help direct capital to very specific types of outcomes. And the transactions have grown at such a pace that the way I try to think about it and look at it is proportionately relative to all new issues, what proportion carry a label? And that just because it carries a label doesn't necessarily mean it's an Impact security from our definition. But it's a good proxy for the way the market has grown.
And roughly about 15% of global debt issuance now carries a label. And that has been a rapidly growing component of the market. And it has really seen very broad diversification across all sectors within fixed income. And really helps now for you to be able to manage portfolios in a very broadly diversified manner, with true impact coming from the direct and measurable outcomes associated with the transactions you're investing. Steve, thank you for that explanation.
Very much appreciate it. Thanks, Matt.