What is modifying is primarily the sustainable finance market composition and the relative weight of different geographic regions and financial instruments. The EMEA (Europe, Middle East, and Africa) region is expected to maintain its global leadership in sustainable issuance and rebound over the course of the year. Within Europe, very different dynamics are emerging.
Central and Eastern Europe is experiencing particularly strong growth, with issuance expected to increase 40% year-on-year in 2025. This momentum has been driven primarily by sovereign issuers and state-owned enterprises and is expected to strengthen further in 2026, contributing to the region’s overall growth. Governments and financial institutions, on the other hand, are essentially stable, while the corporate segment has weakened, partly due to the increased ease with which companies are now able to place traditional, non-ESG debt.
Among financial products, the sustainability-linked segment is currently the weakest element of the market, with a slowdown observed on a global scale.
Despite this, the outsee for the EMEA region remains positive, supported by the refinancing necessarys of maturing bonds and the growing spread of investments in renewable energy and energy transition infrastructure.
Different geographies of growth in sustainable finance between the United States and Asia
The most significant decline in global supply is observed in the United States , where alters in the political and regulatory environment have contributed to a slowdown in sustainable finance issuance. The reduction of some tax incentives, the regulatory rollback, and the scaling back of some initiatives related to climate reporting and diversity have generated greater caution among issuers, especially in the private sector.
In particular, issuance by corporates and financial institutions has decreased, while that by supranational organizations has increased by 21% year-over-year. Growth is forecast to remain modest in 2026, although AI and renewables could provide support.
The situation is different in the Asia-Pacific region, which continues to display solid growth. 2025 closed at similar levels to the previous year, with a strong expansion in green bonds and green loans, while sustainability-linked loans and transition bonds saw a slight decline. Issuance was driven primarily by financial institutions and companies, while governments and supranational organizations slowed slightly.
Companies continue to invest in the transition
Despite market volatility and the effects of geopolitical tensions, the overall picture remains favorable. This is further confirmed by the fact that global emissions in the sustainable finance sector have already reached significant levels ($257 billion) in the first months of 2026. Many companies therefore remain strongly committed to decarbonization and climate risk management.
The 2030 climate tarobtains remain a central reference point in industrial and financial strategies, while governments continue to utilize sustainable finance tools to support the energy transition. At the same time, strengthening rules and standards assists provide greater clarity to investors and issuers, fostering market development.
Sustainable finance supports European real estate
Sustainable finance is also playing an increasingly central role in the recovery of the European commercial real estate market . After the significant correction of 2023, the sector saw a gradual return of investor confidence in 2025, supported by stabilizing valuations and improving liquidity.
Competition has focutilized primarily on prime assets, particularly properties with high energy performance and solid ESG credentials . Secondary assets, on the other hand, require increasingly significant retrofitting to comply with new environmental standards. Sustainability is therefore evolving from a simple regulatory requirement to a true performance driver, influencing both investment decisions and financing strategies.
The European regulatory framework will continue to play a key role in the transformation of the real estate sector. Buildings account for approximately 36% of the European Union’s greenhoutilize gas emissions and are therefore a cornerstone of the climate strategy towards carbon neutrality by 2050.
Several regulatory updates are expected in 2026, including those relating to the Corporate Sustainability Reporting Directive, the revision of the Sustainable Finance Disclosure Regulation, and the implementation of the Energy Performance of Buildings Directive, which will inevitably impact the sector.
At the same time, there is growing attention to physical climate risks , which are also becoming increasingly important in real estate valuations. According to PwC data, 83% of respondents indicate climate risk as the second most relevant ESG factor for financing, immediately after energy efficiency .
In this scenario, green bonds continue to be a key tool for supporting the decarbonization of the real estate sector. In recent years, their share of the sector’s bond issuance has grown rapidly, from less than 20% in 2019 to approximately 40% currently . While remaining below the peak of 55% recorded in 2024, these instruments remain a structural component of the market and a key lever for financing the real estate transformation towards more sustainable and resilient models.
ING’s achievements in sustainable finance
ING reported a particularly strong fourth quarter of 2025. The bank mobilized €56 billion in sustainable finance activities, a 29% increase compared to the previous quarter. Year-over-year volumes reached €166 billion, a 28% increase compared to 2024.
Green loans remain the most popular instrument in terms of number of transactions, followed by sustainability-linked loans and green bonds , while the overall number of transactions reached record levels over the course of the year.
Geographically, EMEA is the largest contributor to ING’s volumes, accounting for 56% of the total, followed by the Americas with 28% and Asia-Pacific with 11%. In the United States, despite declining private activity, increased public sector social bond issuance has assisted support the market.
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(Featured image by micheile hconcludeerson via Unsplash)
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First published in ESG NEWS. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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