The global sustainable finance market gained fresh momentum in the first half of 2025, with green bonds driving a $555.8 billion surge in issuance and development banks joining the $1 trillion issuer club, according to the United Kingdom-based Climate Bonds Initiative.
Cumulative aligned issuance of green, social, sustainability and sustainability-linked, or GSS+ bonds, reached $6.2 trillion by mid-2025, reflecting strong investor appetite and expanding issuer participation.
The total marks a 17 percent increase over the average semi-annual issuance since 2021, reinforcing the steady rise of sustainable finance in capital markets.
Climate Bonds reported that the second quarter of 2025 saw $286.1 billion in aligned GSS+ issuance, the second-highest quarterly figure after Q1 2024’s record $316.5 billion.
“The first half of 2025 marked a milestone, as aligned GSS+ debt volume surpassed USD6 trillion,” said Clodagh Muldoon, head of research at Climate Bonds Initiative. “All themes are thriving, setting an optimistic tone for the second half of the year.”
Green Bonds Lead Market Expansion
Green bonds remained the engine of market growth. Aligned green issuance reached $193.6 billion in Q2 2025, the second-highest quarterly figure after Q1 2024’s $207.4 billion.
Green instruments accounted for 61 percent of aligned issuance in the H1 of 2025, highlighting their dominant role in sustainable finance and the global transition to net zero.
Sustainability-linked bonds, or SLBs, also gained traction, reaching $9.7 billion in aligned issuance, their third-strongest half ever.
The increase reflects growing confidence in performance-based instruments that reward measurable sustainability outcomes.
Development Banks Cross $1tn Threshold
Development banks achieved a major milestone, surpassing $1 trillion in cumulative aligned issuance for the first time. They now join governments, corporates and financial institutions in the $1 trillion issuer group.
Development banks’ growing contribution highlights their central role in financing the net-zero transition. They now represent 45 percent of the cumulative aligned sustainability-labeled debt market, according to Climate Bonds.
Methane Abatement Emerges as Key Theme
Methane abatement is emerging as a new frontier in sustainable finance. Although still at an early stage, Climate Bonds noted several issuances supporting this theme from Belgium’s Fluvius, France’s Waga Energy and U.S.-based Kinetik Holdings.
This growing focus aligns with the “Mobilizing Sustainable Finance for Methane Abatement Programme,” funded by the Global Methane Hub. The two-year initiative seeks to channel capital toward methane reduction and related infrastructure, consistent with 1.5-degree climate targets.
Methodology Ensures Market Integrity
The “Sustainable Debt Global State of the Market H1 2025” report follows Climate Bonds’ Market Intelligence Methodologies, which set benchmarks for scientific rigor and data accuracy in sustainable finance. Only assets that meet strict climate criteria are included, ensuring market integrity and transparency.
These standards help investors and issuers maintain confidence in the credibility of green and sustainable instruments as capital markets expand their role in addressing global climate goals.
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Multilateral Development Banks Hit Record $137B in Climate Finance in 2024
