The overall volume of sustainable bond issuance across fixed income instrument types1 remained broadly stable in 2025 compared to 2024, with total annual issuance reaching approximately $1.1 trillion globally. The portion of total issuance that included second-party verification was also similar to previous years. Despite this stability at the aggregate level, significant shifts occurred across regions, bond types, and sectors.

Green bonds continue to dominate. Green bonds continued to lead the sustainable bond market in 2025, maintaining their position as the largest category by volume. Sustainable bonds followed as the second-largest segment.

Year-over-year trends also differ by bond type. Green bonds and sustainable bonds both recorded modest year-over-year increases, reinforcing their role as core components of the sustainable debt market. Social bond issuance declined in 2025 compared with 2024 as activity normalized after the heightened social spending seen during the pandemic years.

Sustainability-linked bonds (SLBs) continued their multi-year downturn, with 2025 representing the fourth consecutive year of decreased issuance. Transition bonds, a relatively small segment of the sustainable bond market by issuance volume, saw issuance ease after strong growth in 2024. This decline was driven in large part by reduced issuance activity in Asia.

In contrast, blue bond issuance, though a small segment of the market in absolute terms, more than doubled between 2024 and 2025, driven by activity in both Europe and Asia. This growth suggests increasing investor focus on ocean-related sustainability projects and marks a geographic diversification beyond Asia-Pacific’s (APAC’s) historical dominance of this segment.

The sustainable bond market saw significant regional shifts in 2025. Notably, China emerged as the single-largest issuing country, with more than double the total 2025 issuance volume as compared to North America. China’s domestic green finance policies, along with the growth of the banking sector’s sustainable bond programs2,3 likely contributed to this increase (see Spotlight: China section).

Europe maintained its position as the leading region for total sustainable bond issuance and recorded a slight year‑over‑year increase.

North America saw a year‑over‑year decline in total sustainable bond issuance, with volumes falling across the largest sustainable bond types, perhaps reflecting a more cautious issuer stance amid shifting market conditions. However, despite the broader trend, North America did see an uptick in transition and blue bond activity (over $590 million in combined issuance in 2025).

Across APAC, overall total sustainable bond issuance was broadly steady compared with 2024. Higher issuance in China offset declines in several other APAC markets, including a year‑over‑year drop in Japan. Green bond issuance increased across the region, but this was offset by a significant decrease in APAC social bond issuance and low levels of transition bond issuance.

At the country level, among the top 10 countries for sustainable bond issuance, Japan recorded a decline while China posted a year‑over‑year increase of more than 30%. Germany also saw a notable uptick. The United States, on the other hand, saw a 17% reduction in issuance. The difference in trend between China and the United States represents a significant shift in the global sustainable finance landscape.

The euro (EUR) and U.S. dollar (USD) continue to dominate sustainable bond issuance. The euro remained the leading currency associated with sustainable bond issuance in 2025, supported by Europe’s deep market structure and the strong presence of EUR‑denominated issuance from European financial institutions. The USD followed as the second‑largest currency denomination, mostly driven by North American issuers as well as global borrowers tapping USD markets for broader investor reach and liquidity.

By asset class, corporate issuance increased relative to 2024, while government/agency bond issuance declined.4

A sector view of sustainable bond issuance highlights a few notable shifts in market dynamics. Financials were the primary driver of growth, with banks expanding their issuance across regions, helping lift overall market volumes. This trend was particularly pronounced in China and Europe, where major banking institutions significantly expanded their sustainable bond programs. Real estate and real estate investment trusts (REITs) also saw increases along with modest gains in several smaller sectors such as consumer staples, technology, and healthcare. In contrast, many real‑economy sectors experienced year‑over‑year declines. Utilities, materials, industrials, consumer discretionary, and media and communications all saw reduced issuance. Overall, these trends suggest that financial institutions are playing an increasingly central role in channeling capital toward sustainable projects.

One of the notable developments in global sustainable bond issuance in the past year was the rapid expansion of Chinese issuance.5 By country, China has now become the world’s largest sustainable bond issuer, with 2025 issuance volumes that are more than double those of North America. This increase has coincided with domestic green finance policy incentives in China as well as participation from state‑owned enterprises and financial institutions.

Green bonds dominate China’s sustainable bond issuance. In 2025, green bonds accounted for the vast majority (86%, or $152.6 bn) of China’s sustainable bond volume ($177 bn in total), reinforcing their role as an important long-term financing mechanism for environmental projects within the country. China also recorded notable growth in SLBs, in contrast to the global trend of declining SLB issuance.

Financial institutions drive China’s issuance. By sector, financial institutions, particularly banks, led China’s sustainable bond issuance in 2025, followed by utilities and industrial companies. The dominance of the financial sector reflects the central role that state-owned and commercial banks are playing in mobilizing capital for green projects in China.6

Senior and fixed‑rate instruments dominate China’s sustainable bond market. An analysis of debt structure reveals that senior debt dominates China’s sustainable bond issuance. This pattern reflects participation from sovereigns, large corporations, and public-sector-affiliated enterprises with robust credit profiles.

Most Chinese sustainable bond issuance in 2025 featured fixed coupon rates, suggesting an overall market preference for predictable cash flows and simple structures.

An analysis of pre-issuance use-of-proceeds across global sustainable bond issuance for corporates, sovereign and supranational asset classes reflects clear sectoral and reporting preferences and priorities among sustainable bond issuers and investors.

Infrastructure and energy projects attract the largest share of capital. Across the top International Capital Market Association (ICMA)‑mapped green categories, renewable energy continues to lead in terms of total issuance, reflecting sustained investment in new energy generation capacity (solar and wind farms, etc.) as well as grid modernization and upkeep efforts. As it has in previous years, clean transportation follows, supported by ongoing commitments to low‑carbon mobility and public transport in many regions of the world. Energy efficiency remains the third‑largest category, covering a wide range of carbon‑reduction measures from industrial process improvements to building retrofits. Issuance associated with pollution prevention and green buildings, the smallest of the top five categories, also saw total issuance volumes similar to previous years. Together, these use-of-proceeds suggest that the issuance landscape is broadly diversified across corporate, sovereign, and supranational issuers.

Issuance patterns by ICMA social use-of-proceeds categories were stable. Following heightened activity in 2021, sustainable bond issuance associated with the top ICMA social use‑of‑proceeds categories has been mostly steady from year to year. Essential services - including healthcare, education and social care - and socioeconomic advancement - supporting initiatives that expand access to opportunities and address inequality - both consistently represent the largest segments. Affordable housing and affordable infrastructure issuance, the next-largest segment, underscore ongoing efforts in community development and inclusive urban planning. Employment generation issuance is smaller in scale but has also held mostly steady since 2022. Overall, these stable patterns of issuance through time seem to reflect a robust and well-established social bond market across corporate, sovereign, and supranational issuers.

Financing and refinancing dominate eligibility type. Sustainable bond issuance patterns broken down by financing eligibility type illustrate consistent reliance on structures that combine financing and refinancing, which make up the largest share of issuance year by year. Pure financing volumes have remained steady through time but are significantly smaller. These trends highlight issuers’ tendency to use flexible financing and refinancing frameworks, with limited reliance on standalone refinancing structures.

Much of the market’s expenditure profile is undisclosed. Patterns of sustainable bond issuance broken down by eligible expenditure type show that most issuers do not specify whether proceeds relate to capital expenditure (CAPEX), operating expenditure (OPEX) or a combination. In cases where the expenditure profile is disclosed, use of proceeds tied to both CAPEX and OPEX represent the largest disclosed share, while pure CAPEX allocations have been consistently smaller through time. OPEX-only expenditures currently make up the smallest component.

The largest share of issuance with expenditure disclosure is associated with both allocation and impact reporting. Sustainable bond issuance broken down by type of reporting commitment is consistently dominated by structures that commit to both allocation and impact reporting. That said, a notable portion of transactions do not specify their reporting commitments, suggesting that disclosure practices vary across the market despite the large share of issuance associated with combined reporting.

Reporting at the pool-of-bonds level accounts for the majority of issuance. Many sustainable bond issuers report at the pool‑of‑bonds level, with per‑bond reporting representing a much smaller share of issuance through the years. The pool‑level approach is likely favored because it offers greater flexibility, is easier to integrate into existing internal processes, and avoids the need to track and report on each instrument separately.

Issuers demonstrate commitment to post‑issuance external reviews. Bonds associated with these commitments have accounted for the majority of issuance every year since 2019, while transactions without such commitments represent a much smaller share. Although some issuers continue to rely on internal verification or less formal review practices, ICE’s issuance data show a consistently higher incidence of external review commitments across corporate, sovereign, and supranational issuers.

In 2025, aggregate issuance volumes remained consistent with 2024, but the composition of the market shifted – with notable global financial sector growth, a broad slowdown in transition bond momentum, and China’s emergence as the largest source of issuance by country. As we look to 2026, key questions remain: will China continue to be the largest source of issuance by country? Can transition bonds regain momentum as many economies pursue decarbonization? Will financial sector prominence continue, or will real-economy issuance rebound?

The persistent concentration of green issuance in renewable energy, clean transportation, and energy efficiency suggests that capital may continue to flow into sectors most closely aligned with decarbonization strategies. At the same time, the stability of social use-of-proceeds (UoP) categories – particularly essential services and socioeconomic advancement – indicates that there may be continued investor demand for financing that supports inclusive growth. How issuers choose to allocate capital across CAPEX, OPEX and mixed expenditure categories may further evolve as disclosure expectations rise and investors seek clearer connections between bond proceeds, real-world outcomes, and transition-aligned activities.

One thing is clear: in many economies, sustainable bonds have become a key tool for mobilizing capital toward environmental and social objectives. The overall steadiness of total issuance volume between 2024 and 2025 – alongside geographic rebalancing, sectoral shifts, and product innovation – suggests that sustainable bond issuance will remain strong as the market evolves in the years ahead.