What's in store for sustainable finance and ESG in 2025

Executive Summary

A continued focus on climate mitigation financing, as well as growing interest in climate adaptation and nature, will spur green and sustainability bond issuance. Meanwhile, the widening gaps between decarbonization ambitions and implementation will be brought into focus by the contrast of fresh pledges and increasingly destructive climate events.

Explore our outlooks on sustainable finance and ESG below:

» Sustainable finance outlook. We expect global sustainable bond issuance to total $1 trillion in 2025, in line with 2024. Social bonds will be constrained by a lack of benchmark-sized projects, while transition-labeled bonds and sustainability-linked bonds (SLBs) will remain niche segments as they navigate evolving market sentiment. Global focus on sustainable development will support the market, but heightened scrutiny of greenwashing, evolution in market standards and regulations, and a more complex environment, including political headwinds in some countries, will likely stifle growth.

» Environmental, social and governance (ESG) outlook. Policy and financing will shape environmental and social risks in 2025. Businesses will face difficulties managing environmental and social risks in their supply chains, while disruptions from technology, climate change and demographics could heighten social risks and policy hurdles for governments.