Worldwide issuance of sustainable bonds ( green bonds, social bonds, sustainability bonds, sustainability-linked bonds, and transition bonds ) exceeded US$1 trillion in 2024, according to Environmental Finance Data, roughly consistent with the forecast by rating agencies such as S&P and Moody’s earlier last year.

A total of 3,677 sustainable bonds were issued last year, of which green bonds remained the most popular choice by issuers with 1,841 issues amounting to US$611 billion. Both the number and amount exceeded the 2023 totals of 1,722 and US$589 billion, respectively.

Next were social bonds, with 1,278 issues amounting to US$164 billion. That’s slightly down from the 1,491 issues totalling US$180 billion in 2023.

The number of sustainability bonds also decreased marginally from 459 in 2023 to 428 in 2024, but their total value rose from US$162 billion to US$176 billion, indicating an increase in the average size of individual issuances.

Sustainability-linked bonds, meanwhile, saw a decline in both volume and value, with issues dropping by about 30% from 157 to 110, and the total amount halved from US$66 billion to US$30 billion over the period.

The nascent category of transition bonds witnessed strong growth in 2024 with 25 issues valued at US$20 billion, up from 15 issues amounting to US$3.4 billion in the previous year.

Issuer-wise, governments ( including sovereign and municipal ) and their affiliated entities were the top contributors, with 1,817 issues worth over US$372 billion, followed by corporates, financial institutions, and supranational entities, which raised US$295 billion, US$199 billion, and US$138 billion, respectively.

Overall, the market for sustainable bonds was stable in value in 2024, compared with the previous two years, although the number of issues was slightly down.

Outlook for 2025

Looking ahead, the sustainable bond market is likely to remain robust in 2025 amid a more favourable interest-rate environment and rising demand for sustainable investments worldwide. MorningStar expects annual issuance to maintain the US$1 trillion mark. It predicts more green bond issuances to finance environment-friendly activities, such as lithium extraction and manufacturing of materials ( e.g., for insulation ) that help reduce emissions in the building sector.

Opportunities in this area are expected to grow further after the International Capital Market Association last year published guidelines specifying qualified green-enabling activities to alleviate greenwashing risks and boost investor confidence. MorningStar also expects rising interest in biodiversity and nature finance amid ecological degradation concerns and an evolving regulatory environment.