Issuance of green, social and sustainability (GSS) bonds reached a three year high of $966bn in 2024, according to the latest quarterly report by MainStreet Partners.

The data is an 8% increase on 2023 issuances and means that total cumulative GSS bond issuance has exceeded the $5.5 trillion mark. Green bond issuance had its second busiest year accounting for 58% of issuance during 2024 reaching $561bn. Social bond issuances saw the biggest increase in 2024 hitting $251bn (2023: $159bn), while sustainability bond issuance suffered the biggest drop to $152bn (2023: $203bn).

60% of total issuance came from European issuers, and 56% from EUR-denominated bonds.

• In 2025, MainStreet Partners expects GSS Bond issuance to exceed $1tn, however, the growth may have a slightly different look to previous years. Although Green Bonds remain the most active label in the market, we expect moderate growth for the label.

In a statement, MainStreet made the following points concerning the report:

• In terms of regional distribution, the report said that it expects Europe will remain the largest regional market in the world. GSS Bonds are already well established and understood products in the European bond market, and support from policymakers will further facilitate the market’s growth. MainStreet Partners do see signs of maturity in the market and do not expect GSS Bond supply to grow significantly in Europe.

• MainStreet Partners expects 2025 will also see the birth of the “EU Green Bond Standard” market. The EU aims to further strengthen investors’ trust in the green-bond market with a new voluntary standard that requires enhanced reporting and verification. Bonds issued under the EU GBS are required to allocate at least 85% of their proceeds toward EU Taxonomy-aligned sustainable activities.

• The coming into effect of the EU Green Bond Standard is already one of the main developments to follow this year. MainStreet Partners does not foresee a strong adoption in 2025, although the data provider expects to see the impact on volumes to be clearer moving forward.

Pietro Sette, Research Director at MainStreet Partners, said, “2024 has shown outstanding resilience of the GSS Bond market. The continued leadership of European issuers underlines the importance of a strong regulatory environment for the growth and improvement of the market. Despite the positive regulatory trend to date, the look-through approach under the new Paris Aligned Benchmark and Climate Transition Benchmark guidelines pose more than a question mark for fund managers who previously had an “issuer-focused” approach. The next few weeks will prompt some rethinking for investors and will further spur more engagement with issuers.”

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