Key Factors for Thriving 2025 Market
5 for 25 report builds on “1 trillion milestone” 2024.
Highlights:
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In 2024, volume of GSS+ debt in alignment with Climate Bonds Methodologies (aligned) reached USD1.1tn.
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On 31st December 2024, cumulative GSS+ volume stood at USD5.7tn.
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Key factors identified for increased issuance in 2025 include new definitions for taxonomies and increased spending on adaptation and resilience.
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Expect increased visibility from insurance companies in 2025.
London 09/01/2025 09:00 GMT: Today, Climate Bonds Initiative (Climate Bonds) released the 5 for 25 report. Outlining the final numbers in a thriving 2024 market, and highlighting five factors which will increase the flow of green, social, sustainability and sustainability-linked (GSS+) bonds and loans in 2025.
Based on research into the 2024 market trends and areas of urgent focus in the fight against climate catastrophe, these factors look to both build on successes from the previous year and give a comprehensive, panoramic run-down of the socio-economic factors likely to be at the forefront of market activity this year.
The markets insights for 2025 in brief:
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Transition planning will highlight the magnitude of expenditure required to reach net-zero.
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New governments bolster national ambitions.
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Taxonomies: New definitions, and broader interoperability.
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Adaptation and resilience expected to increase
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Insurance companies will step in.
Climate Bonds will continue to work with governments and industries to accelerate policy implementation in 2025. Countries on all continents are rapidly working to develop their own taxonomies reflecting economic sectors of national importance, and there is increased emphasis on interoperability to enable more cross border financial flows. The first update of National Determined Contributions (NDCs) is due in April 2025 and early figures indicate growth in ambition.
Following COP29, green insurance will increase in visibility and presence in 2025. Amid the imperative need for adaptation and resilience spending due to extreme weather events such as the ones we saw in 2024, de-risking will help unlock unused green investment opportunities, addressing the moral hazard of the public sector being asked to take on investment risk.
Caroline Harrison, Director of Technical Development at Climate Bonds: “The GSS+ debt market continued to thrive in 2024. The year end market data was not only a huge source of encouragement and optimism but also highlights the opportunities for a broader range of issuers to deploy into the market in 2025. Updated NDC targets, new governments, and increased participation from insurance make ambitious issuance targets credible in the year ahead.”
Spotlight: Thriving market in 2024
In 2024, the volume of GSS+ debt in alignment with the Climate Bonds Methodologies (aligned) reached USD 1.1tn. By year end, cumulative GSS+ volume stood at USD5.7tn, illustrating the market’s ability to absorb the financial flows required for climate change solutions. Most significantly, cumulative aligned volume of social and sustainability debt each passed the USD1tn milestone in 2024.
Climate Bonds also expects to publish the Climate Bonds Sustainable Debt Global State of the Market 2024 report in early Q2 2025, with all the final figures and a detailed market breakdown.
Read the full version of the report here for the full details.
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Contact for Interviews and further information:
Barney Lloyd-Wood
Communications Specialist, Climate Bonds Initiative
Notes to the editor:
About the Climate Bonds Initiative: Climate Bonds is the leading international non-governmental organisation mobilising global capital for climate action. We drive the growth of the green and sustainable debt market through science-aligned frameworks including our taxonomies and standards, our Certification, our data and insights, and our provision of expert policy and technical advice. More information on our website here.
Disclaimer: The information in this communication does not constitute investment advice in any form, and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation, debt instrument, or investment product is for informational purposes only. Links to external websites are provided solely for informational purposes, and the Climate Bonds Initiative assumes no responsibility for their content. The Climate Bonds Initiative does not endorse, recommend, or provide advice on the financial merits or suitability of any debt instrument or investment product. No information within this communication should be construed as such, nor relied upon when making any investment decision. Certification under the Climate Bond Standard solely reflects the climate-related attributes of the use of proceeds for the designated debt instrument. It does not assess the creditworthiness of the instrument, nor its compliance with national or international laws. All investment decisions remain the sole responsibility of the individual or organisation. The Climate Bonds Initiative accepts no liability for any investments made by individuals or organisations, nor for any investments made by third parties on their behalf, based wholly or in part on information contained in this or any other Climate Bonds Initiative public communication.