Green Bond Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Issuer (Public Sector Issuers and Private Sector Issuers), By Sector (Government Backed Entities, Financial Corporations, Non-Financial Corporations, Development Banks, Local Government, and Others), By Region, & Competition, 2020-2030F

Market Overview

Global green bond market was valued at USD 653.89 Billion in 2024 and is expected to reach USD 1026.17 Billion by 2030 with a CAGR of 7.8% during the forecast period. The market is primarily segmented by issuer type, including public sector issuers such as government-backed entities and private sector issuers such as financial corporations, non-financial corporations, development banks, and local governments. The increasing emphasis on sustainability, climate change mitigation, and environmental responsibility across various sectors is driving the green bond market's expansion. Key growth factors include the rising demand for environmentally friendly investments, the growth of sustainable infrastructure projects, and supportive government policies worldwide promoting green financing initiatives. As the market grows, each issuer type plays a significant role, contributing to the growth trajectory through tailored green bond issuance strategies that cater to specific sectors. Governments and development banks are particularly active, while non-financial corporations and financial entities also continue to tap into green bond markets to finance their green projects and climate-positive initiatives.

Market Drivers

Growing Demand for Sustainable Investments

There is a rising global awareness of environmental issues and the financial sector’s increasing focus on sustainability. Investors are increasingly seeking socially responsible investment (SRI) opportunities that align with their environmental, social, and governance (ESG) goals. Green bonds, which provide funding for projects that address climate change and promote sustainability, meet this demand by offering a structured way for investors to contribute to eco-friendly initiatives. According to a report by the Global Sustainable Investment Alliance (GSIA), global sustainable investment reached USD 35.3 trillion in 2020, which represented 36% of all professionally managed assets. This was a 15% increase from the previous report in 2018, demonstrating the growing shift towards socially responsible investment (SRI) opportunities, including green bonds. The market for such investments is anticipated to grow, as both institutional and retail investors seek options that align with their long-term sustainability objectives.

Government Policies and Regulatory Support

Governments around the world are encouraging green financing through a variety of supportive policies, regulatory frameworks, and incentives. These measures include green bond standards, tax incentives, and commitments to achieving carbon neutrality, which provide the foundation for the market’s expansion. The European Union, for example, has set ambitious climate goals and green financing regulations, stimulating green bond issuance by both public and private entities. In addition, many countries have introduced green bond guidelines and reporting standards to improve market transparency and attract a broader range of investors.

Corporate Commitment to Sustainability

Non-financial corporations are increasingly aligning their business strategies with sustainability principles, recognizing that climate-conscious investments can drive long-term value creation. Green bonds serve as an effective tool for these corporations to finance their sustainability goals, whether it involves reducing their carbon footprint, investing in renewable energy infrastructure, or enhancing resource efficiency. As corporations increasingly adopt sustainability targets, the green bond market provides a way to raise capital for projects that contribute to achieving these objectives. This trend is particularly prevalent among large multinational corporations that are under pressure to demonstrate environmental responsibility and meet investor demands for ESG compliance.

Download Free Sample Report

Key Market Challenges

Lack of Standardization in Green Bond Criteria

One of the major obstacles to the growth of the green bond market is the lack of consistent and universally accepted standards for what qualifies as a “green” project. While numerous guidelines exist, such as the Green Bond Principles (GBP) from the International Capital Market Association (ICMA), the absence of a global, harmonized standard can lead to confusion and inconsistencies. This issue may result in “greenwashing,” where projects that do not meet rigorous sustainability criteria are marketed as environmentally friendly, undermining investor trust in the market. To address this, regulators and industry players must work together to develop clearer and more uniform criteria to ensure that funds raised through green bonds are indeed contributing to genuine environmental benefits.

High Issuance Costs and Administrative Burdens

Issuing green bonds can involve higher costs compared to conventional bonds. Issuers are often required to conduct rigorous environmental impact assessments, provide detailed reports on the use of proceeds, and adhere to transparency requirements. These additional administrative and compliance requirements can deter some potential issuers, especially smaller companies and governments, from tapping into the green bond market. Moreover, for projects with less clear environmental outcomes, the cost and complexity of obtaining certification may outweigh the perceived benefits of issuing green bonds.

Limited Market Liquidity and Depth

Although the green bond market is growing rapidly, it remains relatively small compared to traditional bond markets. Limited liquidity can deter investors, particularly in secondary markets where bonds may not be as easily tradable. The lack of deep, liquid markets may also reduce price efficiency, increasing the cost of borrowing for issuers. As the green bond market matures, increasing market depth and liquidity will be necessary to ensure that it remains an attractive option for both issuers and investors.

Key Market Trends

Emerging Green Bond Innovation

The green bond market is becoming increasingly innovative, with new structures emerging to meet the growing demand for environmentally sustainable investments. These include sustainability-linked bonds (SLBs) and green securitizations, which allow issuers to link bond proceeds to specific sustainability performance targets. These innovations help expand the range of projects that can be financed via green bonds, further driving market growth. In 2024, the European Bank for Reconstruction and Development (EBRD) has issued a record USD 1.03 billion green bond, its largest to date, to fund sustainable projects across energy, water, waste, pollution, and transport sectors. This 7-year bond, which marks EBRD's re-entry into the EUR market after three years, was met with strong investor interest, attracting over USD 2.79 billion in orders.

Integration of ESG Factors in Investment Strategies

Environmental, social, and governance (ESG) factors are becoming more deeply integrated into investment strategies across the financial sector. Institutional investors, such as pension funds and insurance companies, are increasingly aligning their portfolios with ESG criteria. Green bonds offer a straightforward way for these investors to satisfy their sustainability objectives while generating competitive returns. As this trend accelerates, the green bond market will see growing demand from institutional investors seeking to diversify their ESG-compliant assets.

Expansion of Green Bond Markets in Emerging Economies

While developed economies such as Europe and North America dominate the green bond market, emerging economies are beginning to see significant growth in green bond issuance. Governments in emerging markets are increasingly issuing green bonds to finance projects aimed at reducing carbon emissions and supporting sustainable infrastructure development. This trend is particularly evident in regions such as Asia-Pacific, where countries like China, India, and Brazil are ramping up efforts to meet climate goals through green financing.

Segmental Insights

Sector Insights

In the green bond market, government-backed entities are currently the leading segment, as they play a pivotal role in driving the issuance of green bonds through various national and regional policies. These entities include national governments and development banks that issue bonds to fund large-scale environmental projects. Governments' involvement provides a sense of security for investors, which helps increase demand for green bonds. However, the fastest-growing segment is expected to be non-financial corporations. As these companies increasingly adopt sustainability practices and pursue ambitious climate goals, the demand for green bonds to finance such initiatives is accelerating. Large corporations, particularly those in energy-intensive industries, are leading the charge by issuing green bonds to support their renewable energy investments and low-carbon transition strategies.

Download Free Sample Report

Regional Insights

North America is currently the leading region in the green bond market, largely driven by the United States, which has been a key issuer of green bonds. The region benefits from a strong regulatory framework supporting sustainable finance, including established green bond guidelines and standards. The U.S. market has witnessed significant growth, with both federal and state-level initiatives promoting the issuance of green bonds to fund projects aimed at addressing climate change and sustainability goals. Additionally, North America enjoys substantial investor interest in eco-friendly investment opportunities, particularly from institutional investors focused on Environmental, Social, and Governance (ESG) criteria. This combination of regulatory support and market demand positions North America as the dominant player in the global green bond market.

Recent Developments

• In 2024, Robeco introduced a High Income Green Bonds strategy, marking the first Article 9, High Income Green Bonds strategy in the credit market. This benchmark-agnostic, global approach invests across all credit sectors within green bond investments.
• In 2024, Goldman Sachs Asset Management launched a Global Green Bond ETF, aiming to track global G10 green bond issuance. This fund enables investors to replace a portion of their existing global fixed income portfolios with green bonds.
• In 2024, Ecuador introduced a USD 1 billion bond to finance a debt buyback, supporting conservation projects in the Amazon rainforest. This debt-for-nature swap allows Ecuador to purchase international debt at a discount, dedicating the savings to conservation efforts.
• In 2024, Colombia launched the world's first biodiversity bonds at COP16, focusing exclusively on biodiversity projects. This initiative aims to increase private sector investment in biodiversity to meet global conservation goals.

Key Market Players

• Apple Inc
• Bank of America
• JP Morgan Chase
• Barclays
• Citigroup
• Credit Agricole
• BNP Paribas
• HSBC Holdings
• Deutsche Bank
• Iberdrola SA

Report Scope:

In this report, the global green bond market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

·          Green Bond Market, By Issuer:

o   Public Sector Issuers

o   Private Sector Issuers

·         Green Bond Market, By Sector:

o   Government Backed Entities

o   Financial Corporations

o   Non-Financial Corporations

o   Development Banks

o   Local Government

o   Others

·         Green Bond Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  France

§  Germany

§  Spain

§  Italy

§  United Kingdom

o   Asia-Pacific

§  China

§  Japan

§  India

§  Vietnam

§  South Korea

o   Middle East & Africa

§  South Africa

§  Saudi Arabia

§  UAE

§  Turkey

§  Kuwait

§  Egypt

o   South America

§  Brazil

§  Argentina

§  Colombia

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the global green bond market.

Available Customizations:

Global Green Bond market report with the given market data, TechSciResearch offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

·         Detailed analysis and profiling of additional market players (up to five).

Global Green Bond Market is an upcoming report to be released soon. If you wish an early delivery of this report or want to confirm the date of release, please contact us at [email protected]