Sustainable Bond Analysis
Sustainable bond issuance nears $600 billion in H1 2025, setting pace for over $1 trillion in global issuance by year-end.
First Half 2025
Published
September 2025
Monika Sabolova
Saeed Sanei
- Real economy sectors see a decline, while financials add $50 billion in issuance, driven by European and APAC institutions.
- In terms of national issuance volume, China led in H1 followed by France, Germany, and the United States.
- APAC pauses transition bonds issuance despite a sharp rise in overall corporate issuance.
- Green bonds continue to lead; blue bond issuance becomes more regionally diversified compared to H1 issuance in previous years; Sukuk issuance increases.
Overall issuance remains steady relative to previous years
The overall volume of sustainable bond issuance1 across asset classes has remained broadly stable in the first half of 2025 relative to the same period in previous years.
If sustainable bond issuance continues at its current pace, total annual issuance in 2025 will exceed $1 trillion globally, as it did in 2024.
Figure 1. Total sustainable bond issuance across asset classes in each six-month period since H1 2019. Source: ICE as of 8/8/2025.
Green bonds continue to dominate
Green bonds continued to lead the sustainable finance market, representing 58% of total issuance in the first half of 2025 (roughly the same percentage as in 2024). Sustainable fixed income security issuance across asset types followed as the next largest categories, reflecting sustained interest among investors for these categories of issuance.
Figure 2. H1 2025 sustainable bond issuance across asset class by type. Source: ICE as of 8/8/2025.
Transition bond issuance decreases, blue bond issuance diversifies
While blue bond issuance remained the smallest segment by volume, it recorded the fastest year-on-year growth in market share relative to H1 2024, suggesting growing investor focus on ocean-related sustainability.
Transition bonds, on the other hand, saw the steepest decline in percentage terms relative to the first half of 2024, largely driven by a drop in issuance from the Asia-Pacific (APAC) region, particularly Japan, which accounted for the bulk of the transition bond activity in the previous year. However, the Japanese auction calendar for July 2025 indicates a resumption in transition bond issuance, suggesting that the decrease in the first half of 2025 may represent only a temporary pause.2
Meanwhile, sustainability-linked bonds (SLBs) have been on a broadly downward trend since 2021, though volumes have remained mostly stable over the past year-and-a-half (Figure 3).
Figure 3. Sustainable bond issuance across asset classes in each half-year since 2019, broken down by type. Source: ICE as of 8/8/2025.
Europe continues to lead in total issuance
Regional trends in sustainable bond issuance across asset classes in the first half of 2025 reveal a broadly stable landscape. Europe saw a slight decline in volumes but remained relatively steady, continuing to lead in market depth and regulatory initiatives. APAC experienced a modest increase, supported by investor engagement and regional policy initiatives (e.g., Singapore’s update of its Green Bond Framework, China’s Inaugural Sovereign Green Bond Issuance, and several new Nationally-Determined Contributions (NDCs) issued by Japan, Singapore, and New Zealand among others). The trend in APAC corporate issuance, examined later in this report, is particularly noteworthy. Supranational entities significantly ramped up issuance, reinforcing their role in financing global sustainability goals. In contrast, North America recorded a decline and the Middle East and Africa continued to represent a small share of global issuance, with volumes remaining stable.
Figure 4. Sustainable bond issuance across asset classes in each half-year since 2019, broken down by region. Source: ICE as of 8/8/2025.
Increasingly diverse participation in blue bond issuance
Blue bond issuance in APAC has outstripped blue bond issuance in all other regions during the first half of every year since 2021 — and continues to do so in the first half of 2025. However, the first half of 2025 also saw significant blue bond issuance from supranational entities, Latin America and the Caribbean, Europe, and North America, regions that historically delayed their issuance into the second half of each year. In previous years, APAC has generally represented either all or nearly all blue bond issuance, so this regional diversification issuance marks a notable shift (Figure 5f).
In contrast, the relative volumes of green, sustainable, and social bonds issuance by region remained relatively steady between H1 2024 and H1 2025 (Figure 5a-c). As noted above, sustainability-linked bonds (Figure 5d) have seen a steady decline in issuance volume since 2022 — a trend largely driven by decreasing issuance in Europe. APAC issuance of sustainability-linked bonds remained mostly stable over the same period. Transition bonds (Figure 5e) saw a spike in issuance in H1 2024, largely driven by APAC, but are back down to levels similar to H1 2022 and 2023 in H1 2025.
Figure 5. Regional breakdowns of; A. total green bond issuance; B. total sustainable bond issuance; C. total social bond issuance; D. total sustainability-linked bond issuance; E. total transition bond issuance, and; F. total blue bond issuance for every first half of the year since 2019. Source: ICE as of 8/8/2025.
Corporate issuance (excluding financials and REITs) is rising in APAC, a trend driven by China
When focusing specifically on corporate sustainable bond issuance, excluding financials and REITs allows a more nuanced picture to emerge. North America saw a pronounced drop in corporate issuance, while APAC posted a notable increase, driven predominantly by a surge in activity from China (Figure 6, as well as more detail in Figure 8). This uptick reflects China's growing corporate participation in sustainable bond issuance, supported by recent domestic policy initiatives.
Figure 6. Corporate sustainable bond issuance (excluding financials and REITs) in the first half of every year since 2019. Source: ICE as of 8/8/2025.
Among government/agency bond issuance, supranational entities overtook Europe in sustainable bond issuance during the first half of 2025 (Figure 7). At the same time, APAC and Europe government/agency issuance decreased markedly in H1 2025 relative to H1 2023 and H1 2024.
Figure 7. Government/agency sustainable bond issuance, broken down by region, in the first half of each year since 2019. Source: ICE as of 8/8/2025.
China issuance up, Italy and Japan down
Supranational sustainable bond issuance also exceeded that of individual countries in the first half of 2025. China saw the second-largest amount of issuance in H1 2025, followed by France, Germany, the United States, and Korea. China saw a significant increase in total issuance between H1 2024 and H1 2025, while Japan and Italy saw notable decreases (Figure 8).
Figure 8. Total cross-asset type sustainable fixed income security issuance for the 20 largest issuer countries in H1 2024 and H1 2025. Source: ICE as of 8/8/2025.
Issuance remains stable across asset classes, while financial sector issuance saw a significant increase
Patterns of sustainable bond issuance by asset class remained broadly stable in H1 2025, with slight increases in corporate and government/agency bond issuance relative to previous years (Figure 9).
Figure 9. Total sustainable bond issuance over each six-month period since 2019, broken down by asset class. Source: ICE as of 8/8/2025.
However, looking at the sectoral breakdown, there was a noticeable shift in issuance patterns. Real economy sectors - including utilities, materials, industrials, and consumer discretionary - saw a decline in sustainable bond issuance in the first half of 2025 versus the first six months of 2024. In contrast, the financial sector experienced a significant increase, indicating a growing role for financial institutions in driving sustainable finance activity during this period (Figure 10).
Figure 10. Change in issuance by sector and bond type in H1 2025 versus H1 2024. Source: ICE as of 8/8/2025.
By region, this increase in corporate issuance in the financial sector between H1 2024 and H1 2025 is largely driven by changes in issuance in Europe and APAC. Over the same period, Latin American and North American corporate financial issuance decreased (Figure 11).
Figure 11. Changes in corporate financial sustainable bond issuance between H1 2024 and H1 2025 by region. Source: ICE as of 8/8/2025.
Figure 12. Changes in corporate sustainable bond issuance between H1 2024 and H1 2025 by financial sector. Source: ICE as of 8/8/2025.
Green Sukuk issuance on the rise
Sukuk issuance has seen a significant increase over the past six years, growing over 500% in H1 2025 compared to the first half of 2019. Sukuks still only make up ~1% of all sustainable bond issuance but they have become a significant part of the market with a shift away from sporadic sovereign issuances, towards a pattern of consistent corporate issuance.
Figure 13. Issuance in USD every half-year for all sustainable sukuks from H1 2019 through H1 2025. Source: ICE as of 8/8/2025.
This increase in issuance suggests that many Muslim-majority nations are expanding their climate and sustainability initiatives, a trend that has also been apparent in the locations of the recent United Nations Framework Convention on Climate Change (UNFCCC) Conferences of the Parties (COPs), hosted in Egypt in late 2022, the UAE in late 2023, and Azerbaijan in late 2024.
In light of the growth of Sukuk issuance, ICE launched the ICE US Dollar Sukuk Green Index (USDSUKGR) and the ICE US Dollar Sukuk Green, Social & Sustainable Index (USDSUKGS). These indices will likely be central in the growth and uptick of these instruments within Islamic finance communities and beyond.
1 Overall sustainable bond issuance here refers to issuance across the following asset classes: corporates, sovereigns, supranationals, municipal bonds, securitized and money market instruments.
2 Ministry of Finance, Japan. (July 15, 2025). Auction Result of 5-year Climate Transition JGBs on July 15, 2025. Available at; https://www.mof.go.jp/english/policy/jgbs/auction/calendar/eresul/eresul20250715.htm
Past reports
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A guide to sustainable bonds
Blue bonds
Invest in water and wastewater management, marine ecosystem restoration, sustainable shipping
Green bonds
Invest in environmental and climate-related projects, renewable energy
Social bonds
Invest in social projects, affordable housing, job creation, healthcare access, education
Sustainability bonds
Invest in a combination of green and social projects
Transition bonds
Invest in reducing the issuer’s environmental impact and transition to sustainable business practices
Sustainability-linked bonds
Link the bond’s coupon to the issuer’s progress in meeting specific sustainability goals
A type of Islamic bond that supports environmental and climate-friendly projects without violating shariah principles
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