Financial intelligence provider Moody’s Ratings has forecast sustainable bonds to see the fifth consecutive year of issuance around US$1 trillion in 2025. Moody’s says that this growth rate will be limited by political headwinds in some countries. The prediction comprises US$620 billion of green bonds, US$150 billion of social bonds, US$175 billion of sustainability bonds, US$20 billion of transition bonds and US$35 billion of sustainability-linked bonds (SLBs). “The ramp-up in clean energy investment in many countries will spur sustainable issuance in 2025, especially green and sustainability bonds,” the report read. “While we expect climate mitigation projects will remain the focus, investment drivers will evolve, leading to more issuance related to data centres, nuclear energy and emerging green technologies.” While increasing just 2%, the growth in green bonds will break the previous record of US$617 for issuances set in 2021. SLBs are expected to see the most growth, with issuances increasing 14% from 2024, but this falls far short of the US$80 billion annual average achieved between 2021-23. Meanwhile, social bond issuance is expected to slip by 9%. According to Moody’s, Europe will lead sustainable bond issuance but may remain flat “given the maturity of the market”, and much lower than the 2021 record of US$594 billion. The report noted that Asia-Pacific will “remain an important driver” of sustainable bond volumes, while issuances in North America will “remain muted amid a retrenchment of climate policies under a new US administration”. Moody’s also highlighted that volumes of issuances in emerging markets – particularly in Latin America and the Caribbean – are likely to rise ahead of COP30 in Brazil in November.
