ESG Finance Report Q4 2025

Among the main findings of this report:

 

1. ESG bond and loan issuance totalled €679.4bn in 2025, a 2.3% decline from €695.3bn issued in 2024.
1. €127bn was issued in Q4 2025, the lowest quarterly amount since Q3 2023 and the lowest Q4 since 2019.
2. In 2025, French issuers led in total loan and bond origination with €143bn, followed by German issuers with €103bn. Notably, around 44% of sustainability-linked bonds were originated by Italian issuers.

1. In 2025, European green bond, sustainability-linked and transition bond, and social bond issuances declined compared to the previous year. While sustainable bond issuance was the only ESG bond category that exhibited an annual increase in 2025, totalling €38bn.
1. Green bond issuance totalled €291bn in 2025, representing the first annual decline in our records.
2. Social bond issuance accumulated €47bn in proceeds in 2025, the lowest annual issued amount since 2019.
3. Sustainability-linked bond issuance also reached the lowest annual amount observed since 2019, with €16bn in proceeds.

1. The share of ESG bonds in total bond issuance in Europe has decreased since 2022. ESG-labelled, sustainability-linked and transition bonds represented 11.3% of total European bond issuance in 2025, down from 12.9% in 2024.

1. As of 2025, 26 EU Green Bond Standard (EU GBS)-compliant bonds have been issued, representing 7.8% of the total green bonds issued in the EU (€246.3bn). 

1. Global ESG Funds reached a new record high with USD 12.8tn at the end of 2025, representing a 24.3% YoY growth, which was primarily driven by increased allocations to equity and bond funds.
1. Global ESG Funds saw inflows reaching USD 333bn in 2025, primarily driven by European funds.

1. ETS carbon allowance prices continued to rise in Q4 2025. Most recently, however, EU and UK carbon prices declined sharply falling by 24.8% and 37.5%, respectively, between mid-January and mid-February 2026.
1. Several factors may explain the decline. In February, some EU leaders raised concerns about the wider impact of ETS on EU industrial competitiveness and commented on the need to revise the functioning of the EU ETS market.
2. The EU Commission and the UK Government announced the intention to link the EU and UK carbon ETS last year, and in mid-January 2026 it was confirmed that negotiations were scheduled to start.