The global issuance of sustainable bonds reached €878bn in 2024, surpassing the levels recorded in 2022 and 2023. According to a report by LGX on 30 January 2025 and data provided by the bourse to Paperjam on 2 February 2025, this made 2024 the second-best year for sustainable bond issuances on record, following 2021. The study utilised data from the LGX DataHub, which has tracked the global sustainable bond market since 2020.
Green bonds
Green bonds continued to dominate the sustainable bond market in 2024, reaching €518bn and accounting for 59% of sustainable bond issuances and 54% of the total volume. These figures were roughly in line with 2023, when green bonds represented 58% of the total amount issued and 54% of issuances. The LGX report found that the private sector played a key role, contributing 68% of green bond issuances.
Social bonds
Social bond issuances remained stable in 2024, totalling €126bn, consistent with levels observed over the previous two years. The LGX report noted that while social bond issuances peaked in 2021 due to efforts by supranational, quasi-sovereign and agency issuers to mitigate the effects of the Covid-19 pandemic, 2024 saw Asian issuers offset declines in other regions.
Asian issuers accounted for 46% of the market share in terms of issuance volume, surpassing European issuers, who held 39% of the market. The report found that this marked a notable shift in regional dynamics.
Sustainability bonds
Sustainability bond issuances reached their highest levels since the market’s inception, accounting for 23% of the total amount issued in 2024. The LGX report attributed this growth primarily to increased issuances by supranational entities, with additional contributions from Asia.
The World Bank was particularly active in this segment, issuing ‘outcome bonds’ such as the Plastic Waste Reduction-Linked Bond in January and the Amazon Reforestation-Linked Bond in August 2024. The report suggested that other multilateral development banks might adopt similar mechanisms in future to attract private capital for climate initiatives.
Despite the rise in supranational issuances, private sector participation in sustainability bonds remained limited, representing just 29% of the total amount issued in 2024.
Sustainability-linked bonds
Sustainability-linked bonds (SLBs) continued to struggle, with issuances declining at a compound annual growth rate of 32% since 2020. The LGX report highlighted that while SLBs experienced strong growth in 2021, issuance volumes have steadily decreased since 2022.
In 2024, there were only 141 SLB issuances. Issuers from South and North America significantly reduced their participation, with issued amounts dropping from €18bn in 2023 to just €2bn in 2024. The report noted that there were no issuances by supranational entities and only a few sovereign issuances.
The LGX report cited several challenges contributing to the decline. Issuers faced difficulties in setting targets that were ambitious enough to be credible yet realistic enough to be achievable. A lack of familiarity with SLBs, combined with the complexity of defining, monitoring and reporting on targets, was identified as a barrier for both issuers and investors.
Despite these obstacles, the report found that most SLB targets were successfully met. For the relatively few missed targets, geopolitical events were often cited as a factor.
Geographical trends
European issuers continued to dominate the sustainable bond market in 2024. However, the LGX report found a significant increase in the share of supranational issuers. Meanwhile, Asian issuers doubled their market share from 2020, reaching 27% of the total volume issued.
The report concluded that the sustainable bond market remained resilient in 2024, with strong growth in sustainability bonds and stable issuance levels for social and green bonds. However, challenges persisted for SLBs, highlighting the need for clearer benchmarks and improved understanding of the financial product.