Global issuance of green, social and sustainability (GSS) bonds fell by 13% in the first half of 2025, reaching $495 billion, according to MainStreet Partners’ data.
“A mix of macroeconomic factors including inflationary pressures, trade uncertainty and geopolitical tension has created a more cautious environment for both issuers and investors over the first half of 2025,” finds the report.
Despite the dip, issuance in the second quarter stood at around $250 billion – similar to levels seen in Q2 2024.
UK green bond issuance rose by 10% year-on-year to $14.7 billion, up from $13.3 billion in 2024. Financial institutions mainly drove this growth, accounting for 64% of the UK’s green issuance – up from 50% last year and well above the global average.
Supply of social and sustainability bonds remained stable during the first half of the year, at $82 billion and $131 billion respectively. However, issuance of sustainability-linked bonds (SLBs) fell sharply, reaching $421 million – the “weakest H1 issuance on record”.
On average, GSS bond issuers showed stronger alignment with the EU Taxonomy than their non-GSS counterparts, with 43% eligibility and 15% alignment versus 31% and 9% respectively.
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Utilities stood out as the strongest performer, with 44% of their revenue and 73% of their capital spending aligned with the Taxonomy. Real estate led in eligibility, with 89% of activities qualifying, but only 30% of that eligible revenue was actually aligned.
Meanwhile, uptake of the EU Green Bond Standard reached €8.5 billion by mid-2025, bolstered by strong participation from supranational and public entities.
“The Omnibus reform has significantly reduced the scope of mandatory sustainability reporting under CSRD, postponing disclosure obligations for listed SMEs to 2028 and cutting the number of reporting firms from 50,000 to around 11,000,” stated the report.
While volumes have declined in the short term, the report suggests the market’s structural foundations remain intact, supported by evolving regulation and deepening investor focus on impact and transparency.
Pietro Sette, research director at MainStreet Partners, commented: “Despite a tougher macroeconomic backdrop, Green Bonds have remained a resilient and credible instrument for sustainable finance, especially among seasoned issuers who are increasingly using GSS bonds to finance activities that meet rigorous criteria.
Our latest data shows that GSS Bonds continue to channel capital toward more Taxonomy-aligned economic activities. However, persistent gaps in transparency and alignment remain. As investor expectations evolve, closing these gaps will be essential to strengthen regulatory adherence and safeguard long-term market integrity.”
