Sustainable bonds hit $US7bn

The global sustainable bond market reached US$6.9 trillion at the end of 2024, the Climate Bonds Initiative's latest Global State of the Market Report shows.

The Climate Bonds Initiative examined green, social, and sustainability (GSS) and sustainability-linked bonds (SLBs) in its yearly analysis, finding that the sector reached new highs thanks to a 31% increase in sustainable deals year on year.

Europe accounted for more than half (58%) of the green bond volumes, contributing US$388.4 billion.

Sovereigns dominated the top 10 largest issuers of sustainable bonds, with Germany being the largest contributor (US$19bn), followed by the UK (US$17.3bn) and France (US$15.3bn).

The US increased its issuance over the 12 months and topped the aligned green bond market following a slump in 2023.

"Despite a drastic shift in climate policies in 2025, the US was the top country for aligned green bonds in 2024 by both volume and deal count, issuing 1413 deals, which was considerably higher than any other country, with China second with 351 deals," the Climate Bonds Initiative said.

"The US also emerged as the top-issuing country for sustainability bonds, totalling US$14.2 billion across 840 deals. Green bonds from American municipalities increased 22% in 2024, reaching a record high of US$22.6 billion."

Asia Pacific overtook Latin America and the Caribbean as the largest source of sustainability-labelled debt in 2024, accounting for 29% of aligned sustainability volume, with China in the lead.

"Asia Pacific ranked second accounting for 15% of the SLB volume priced, driven by issuance from China (US$7bn); however, Thailand was the largest source of aligned SLB debt owed largely to the Thai Government Bond detailed earlier," the research found.

Social bonds contributed 16% to GSS volumes, reaching US$167.6 billion. The Korea Housing Finance Corporation, which provides long-term housing finance services, was the largest social bond issuer in 2024 with US$14.8 billion.

French government-backed Caisse d'Amortissement de la Dette Sociale (CADES), which funds the country's social security system, came in second place with a cumulative social bond volume of US$143.3 billion.

Clodagh Muldoon, the head of research at the Climate Bonds Initiative, commented that sustainable finance markets enjoyed a record year in 2024 supported by the European green bond market which experienced an encouraging increase in issue volume.

"The continued growth in the GSS+ market is a positive demonstration of issuers' ambition to decarbonise their activities and investors willingness to support those who are doing so," she said.