The market for eco-friendly investing is booming

Summer is coming and green bonds are blooming.

Issuers of such bonds promise to use the proceeds on environmentally friendly projects. There are no hard and fast parameters for what a green bond can fund, but they cover areas like renewable energy, deforestation, green buildings, clean transportation and water treatment.

Global green bond issuance stands at $21.7 billion so far in 2016, up 78% from $12.1 billion issued in the same period last year. That’s a record high, according to a note circulated by Dealogic, and the volume of green bonds has already reached 59% of the total in 2015.

Most of the bonds were sold by global agencies like the World Bank, but an increasing number of financial institutions and private companies are joining in.

“My view is that once you have a leader come to the sector, others will follow,” Buchta said.

Bank of America Merrill Lynch is the top bookrunner for global green bonds so far this year with a 13.5% market share. That’s followed by Guotai Junan Securities Co and Haitong Securities, according to Dealogic.

Chinese companiesare getting in on the act too, as the government is supporting green bonds as a way to finance its environmentally-friendly initiatives, such as building clean-power generators. China issued $7.9 billion in green bonds in the first quarter of this year. That’s nearly half of the quarter’s total global volume and makes China the top issuer for the first time, according to credit rating agency Moody’s.

“There’s significant momentum on the heels of adopting the climate agreement in Paris at end of 2015,” Henry Shilling, a senior vice president at Moody’s, told Business Insider. “It requires capital reallocation to meet those commitments – which involves trillions of dollars in renewable energy and low carbon investments – and green bonds play an important role.”

Moody’s expected green bonds volume to reach $50 billion this year. We’ve already seen an uptick in the first quarter and if that trend persists, issuance could beat Moody’s projections and hit a new high at $70 billion by the end of 2016, Shilling said.