（Singapore, 26.12.2025）Global sales of green bonds and loans have climbed to a new record in 2025, showing that investor appetite for climate-friendly assets remains strong even as governments in the US and Europe step back from some environmental commitments.
According to data compiled by Bloomberg Intelligence, worldwide issuance of green debt has reached US$947 billion so far this year, the highest level ever recorded. The surge comes despite political pushback against climate policies, particularly in the US under President Donald Trump, who has openly supported fossil fuels and rolled back clean-energy subsidies and regulations. Several European countries have also eased environmental rules, citing concerns over economic growth and competitiveness.
Yet investors appear to be focusing less on politics and more on long-term demand — especially the growing need for energy infrastructure driven by artificial intelligence, data centers, electrification and cooling.
Market participants say green investments are increasingly seen as essential infrastructure plays rather than purely ethical or ESG-focused strategies.
“Green investments are now viewed as core infrastructure and industrial opportunities,” said Melissa Cheok, associate director of ESG investment research at Sustainable Fitch. “Capital is flowing toward areas with strong revenue visibility, policy support and structural demand, such as grid upgrades and renewable power linked to electrification.”
Asia-Pacific leads the growth
This shift in perception has helped renewable-energy assets perform strongly in financial markets. Global clean-energy stock indexes are heading for their first annual gains since 2020, comfortably outperforming the broader S&P 500. Shares of companies involved in power grids, batteries and energy storage have been particularly popular.
The Asia-Pacific region has emerged as a major driver of green debt issuance. Companies and government-linked entities in the region raised US$261 billion, about 20% more than last year.
China played a central role, issuing a record US$138 billion in green bonds, mainly through its largest banks. The country also made headlines earlier this year by launching its first sovereign green bond in London, signaling its intention to attract more international capital.
India has also accelerated its renewable push, backed by strong government support and rising energy demand. Together, China and India are expanding solar, wind and grid infrastructure at a pace that continues to attract global investors.
One reason Asia-Pacific stands out is the so-called “greenium” — the lower borrowing costs issuers can enjoy by labeling bonds as green. According to BloombergNEF, some Asia-Pacific borrowers received discounts of more than 14 basis points in November simply by issuing green bonds. These savings make green financing especially attractive for funding renewable energy, electric transport and low-carbon projects.
European lenders remain key players in underwriting green debt. BNP Paribas and Crédit Agricole are the world’s top arrangers of green bonds this year, Bloomberg data show.
Overall, the global green bond market has expanded rapidly, growing at a 30% compound annual rate over the past five years. Green bonds now make up about 4.3% of all global bond issuance, according to researchers from LSE Group.
Looking ahead, lower US interest rates and refinancing needs could push green bond sales even higher. BNP Paribas Asset Management estimates issuance could reach US$1.6 trillion next year, assuming market conditions remain supportive.
Green-related stocks have been among the best performers in 2025. Clean-energy indexes tracked by S&P Dow Jones Indices and WilderShares have surged 45% and 60%, respectively, although both are still below their peaks in 2021.
In the US, solar and battery storage companies such as SolarEdge Technologies have led gains. In China and Germany, wind turbine manufacturers have seen strong rallies.
India has also become a hotspot for renewable-energy initial public offerings. This year alone, 11 renewable companies raised more than US$1 billion through IPOs, while another six are seeking over US$3 billion. By comparison, 14 renewable firms raised US$2.4 billion last year.
Despite the global record, green debt growth has been uneven. In the US, green debt issuance fell 7% to US$163 billion, reflecting weaker policy support and reduced government involvement. Issuance by supranational institutions also declined by a similar amount.
Germany’s green fundraising remained steady at around US$79 billion, showing resilience but little growth.
India, meanwhile, recorded a record US$7 billion in green loans, but intense competition among foreign banks has squeezed profit margins. Financing margins for renewable projects have narrowed by 5% to 10%, according to Sumitomo Mitsui Banking Corp.
Sustainability-linked debt struggles
While green bonds continue to thrive, other forms of sustainable finance are losing momentum. Sustainability-linked debt, which ties borrowing costs to ESG performance targets, dropped by about 50% to US$165 billion this year. Concerns about greenwashing where companies exaggerate their environmental credentials have made investors more cautious.
Issuance of transition bonds, designed to help high-emission industries cut carbon output, fell even more sharply, dropping to just US$10.9 billion.
However, some analysts believe this trend may reverse. Changes to European fund rules over the next two years could allow asset managers more flexibility in defining what counts as a sustainable investment, potentially reopening funding for emissions-reduction projects in polluting sectors.
Despite record green bond issuance, overall global sustainable debt volumes fell to about US$1.6 trillion, down more than 8% from 2024. This decline reflects weakness in sustainability-linked and transition finance, even as green bonds hit new highs.
Separately, the US saw more than US$500 billion in social bond issuance, mainly linked to Ginnie Mae, which supports mortgage-backed securities.
Taken together, the data suggest a market that is evolving rather than retreating. Investors may be less focused on climate politics and labels, but demand for energy, grids and electrification fueled by AI and digital growth is keeping green finance firmly in the spotlight.
