Sustainable Finance Market Size and Share Outlook - Forecast Trends and Growth Analysis Report (2025-2034)

The global sustainable finance market was valued at USD 778.87 Billion in 2024. It is expected to grow at a CAGR of 22.40% from 2025 to 2034, reaching nearly USD 5878.67 Billion by 2034, as sustainable finance supports green initiatives and socially responsible businesses, driving innovation, job creation, and long-term economic stability.

Global Sustainable Finance Market Report Summary

Description

Value

Base Year

USD Billion

2024

Historical Period

USD Billion

2018-2024

Forecast Period

USD Billion

2025-2034

Market Size 2024

USD Billion

778.87

Market Size 2034

USD Billion

5878.67

CAGR 2018-2024

Percentage

XX%

CAGR 2025-2034

Percentage

22.40%

CAGR 2025-2034 - Market by Region

Asia Pacific

25.1%

CAGR 2025-2034 - Market by Country

India

25.5%

CAGR 2025-2034 - Market by Country

Brazil

24.4%

CAGR 2025-2034 - Market by Transaction Type

Green Bond

25.1%

CAGR 2025-2034 - Market by Industry Vertical

Utilities, Transport and Logistics

25.3%

Market Share by Country 2024

Mexico

1.7%

Global Sustainable Finance Market Growth

Green bonds have become increasingly popular around the globe as a tool for sustainable finance. Green bonds, especially climate bonds, have experienced significant growth over the last few years, driven by a rising interest among investors in funding projects that promote environmental sustainability through green debt instruments. This growing enthusiasm for green bonds and loans led to a remarkable increase in issuance value, which rose by approximately 50% in 2019, surpassing USD 250 billion by 2020, thereby leading to the sustainable finance market expansion.

Sustainable investments have demonstrated strong financial performance and effective risk management, attracting investors who seek to achieve financial returns while promoting positive environmental and social impacts. This change in investor focus has resulted in a notable increase in the availability of sustainable investment products and strategies, driving the growth of the sustainable finance sector. Additionally, advancements in technology and data analytics have played a vital role in the evolution of this market. Improved access to data on Environmental, Social, and Governance (ESG) factors has enabled investors and financial institutions to assess the sustainability performance of companies and investment portfolios with greater accuracy.

Furthermore, technological platforms and tools have simplified the integration of ESG factors into investment decision-making, making sustainable finance more efficient and accessible. Companies and organisations are increasingly recognising the essential role of sustainability in their long-term strategies. Adopting sustainable practices not only helps mitigate risks but also enhances brand reputation, fosters customer loyalty, and improves employee engagement. This increased emphasis on corporate sustainability has led to a rising demand for sustainable finance solutions that support green initiatives, sustainable supply chains, and responsible business practices.

Key Trends and Developments

The growth of the sustainable finance market can be attributed to increasing regulatory pressure globally, heightened awareness of climate change, and growing investor interest in sustainable financial products.

June 2024

Indosuez Funds introduced Chronos Green Bonds 2028; a fixed-maturity investment vehicle focused on green bonds from companies dedicated to projects that align with the United Nations' Sustainable Development Goals. This fund is categorised as Article 9 under the EU's Sustainable Finance Disclosure Regulation (SFDR) and is characterised by a conservative risk profile, aimed at generating returns while maintaining a moderate level of risk. Indosuez Funds' Chronos Green Bonds 2028 represents a strategic investment choice for those looking to align their financial goals with their values.

February 2024

Deutsche Bank concentrated its efforts on sustainable finance by creating a thorough framework for promoting the adoption of sustainable finance. This framework includes guidelines, practices, and standards aimed at assessing and carrying out transactions related to sustainable financing. The financial instruments developed under this framework are meant to support initiatives like sustainable agriculture, clean transportation, and renewable energy, all of which are in line with environmental sustainability goals. This commitment to sustainable finance reflects a broader trend within the financial sector, where institutions are increasingly recognising their role in fostering a more sustainable future.

January 2024

The State Bank of India effectively secured USD 250 million by issuing green bonds set to mature in December 2028. The funds generated from this green bond issuance will be directed towards qualifying green projects, in line with SBI's ESG Financing Framework. This effort highlights SBI's dedication to sustainable development and its aim to foster a positive environmental impact. By directing these funds towards qualifying green projects, SBI is taking meaningful steps to address environmental challenges and contribute to a more sustainable future, all while enhancing its position in the evolving landscape of responsible finance.

February 2023

KPMG and Workiva Inc. enhanced their partnership to deliver comprehensive solutions and services centered on Environmental, Social, and Governance (ESG) factors. This expanded collaboration allows KPMG to better assist organisations in the smooth integration of ESG data, processes, controls, and reporting capabilities. As a result, it fosters trust, reduces risks, and creates new value for companies striving for a sustainable future. The alliance between KPMG and Workiva equips businesses to tackle the challenges of ESG integration, ensuring they meet the growing expectations of stakeholders and regulators in the changing landscape of sustainable business practices.

Rise in Regulatory Pressure across the World

Regulatory frameworks play a crucial role in shaping the sustainable finance landscape. Across the globe, governments are implementing policies that mandate the incorporation of environmental, social, and governance (ESG) criteria into business operations. These policies encompass requirements for sustainability disclosures, carbon pricing initiatives, and guidelines for green investments. Such regulations compel companies to align their financial strategies with broader societal objectives, including climate action and social equity. As these regulations tighten, businesses and financial institutions are increasingly motivated to adopt sustainable practices, thereby fostering the growth of sustainable finance.

Rise in Investor Interest in Sustainable Financial Products

One of the notable trends in the sustainable finance market is the rising consumer inclination towards sustainable financial products. The demand for sustainable financial products is growing, fuelled by an increasing awareness of the long-term advantages of responsible investing. Both institutional and retail investors are actively pursuing investments that reflect ESG principles, as they believe that companies committed to sustainability are more likely to achieve long-term growth and effectively manage risks. This heightened interest in ESG-compliant assets is transforming financial markets, resulting in a rise in green bonds, sustainability-linked loans, and various other sustainable investment options, all of which contribute to the expansion of the sustainable finance sector.

Rising Awareness Regarding Climate Change

The rising global acknowledgment of climate change as a significant economic threat is a major catalyst for the sustainable finance market. Governments, corporations, and financial institutions are facing increasing pressure to lower greenhouse gas emissions, implement climate-resilient strategies, and transition to a low-carbon economy. Investors are placing greater emphasis on climate-related investments, such as renewable energy projects, sustainable agricultural practices, and low-carbon technologies. As the economic consequences of climate change become more evident, the focus on sustainable finance continues to intensify.

Adoption of Technological Innovations

Technological progress is essential for the expansion of the sustainable finance market. Innovations in areas such as clean energy, electric vehicles, carbon capture, and blockchain are creating fresh opportunities for sustainable investments. These advancements offer effective solutions for minimising environmental impacts and enhancing efficiency across various sectors, making sustainability more attainable and economically feasible. As technology advances, it reduces the costs associated with green investments and fosters the growth of sustainable business models, impacting the sustainable finance market revenue and increasing investor interest in this sector.

Global Sustainable Finance Market Trends

The market trends are undergoing significant transformations, fuelled by a surge in consumer demand for environmentally and socially responsible products, heightened regulatory scrutiny, and an increasing emphasis from investors on Environmental, Social, and Governance (ESG) criteria. A key trend is the emergence of green finance, where financial institutions and companies are directing investments toward renewable energy, sustainable infrastructure, and low-carbon technologies. Financial instruments such as green bonds, ESG-focused funds, and sustainability-linked loans are gaining popularity, attracting capital for initiatives aimed at reducing carbon emissions and enhancing environmental resilience.

Moreover, companies are setting more ambitious sustainability goals, including achieving net-zero emissions and improving transparency within their supply chains. Technological advancements are facilitating more sustainable practices across various sectors, including energy, agriculture, and manufacturing. Consumer preferences are increasingly favouring businesses that demonstrate strong sustainability commitments, prompting companies to innovate and adopt circular economy principles. As sustainability becomes a core component of long-term value creation, these trends are transforming sectors and accelerating the shift toward a sustainable global economy.

Global Sustainable Finance Industry Segmentation

The EMR’s report titled “Global Sustainable Finance Market Report and Forecast 2025-2034” offers a detailed analysis of the market based on the following segments:

Breakup by Asset Class

• Equities
• Fixed-income
• Multi-asset
• Alternatives

Breakup by Transaction Type

• Green Bond
• Social Bond
• Mixed-sustainability Bond
• Others

Breakup by Investment Style

• Active
• Passive

Breakup by Investor Type

• Institutional Investors
• Retail Investors

Breakup by Industry Vertical

• Utilities
• Transport & Logistics
• Chemicals
• Food & Beverages
• Government
• Others

Breakup by Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East and Africa

CAGR 2025-2034 - Market by

Country

India

25.5%

Brazil

24.4%

UK

21.3%

USA

21.2%

Japan

21.0%

Canada

XX%

Germany

XX%

France

20.0%

China

XX%

Australia

XX%

Saudi Arabia

XX%

Mexico

XX%

Italy

19.2%

Global Sustainable Finance Market Share

According to the sustainable finance market analysis, institutional investors benefit by aligning their portfolios with ESG criteria, fostering long-term growth and managing risks. Supporting sustainable investments not only contributes to global environmental goals but also opens emerging market opportunities, boosting financial performance. A Deloitte and Fletcher School study in August 2024 revealed that 93% of Indian institutional investors considered sustainability in their due diligence, with 78% investing up to 30% of funds in ESG-focused organisations, driven by regulatory and social/environmental objectives.

Retail investors benefit from sustainable finance by investing in products that reflect their ethical values, contributing to environmental and social impact. With increasing demand for ESG-compliant assets, retail investors can seize growth opportunities in the sustainable finance market and potentially earn competitive returns. In November 2024, Atradius DSB, Lendahand, and Carabus introduced a new financing model offering full guarantees for European retail investors in social impact projects in emerging markets, promoting sustainable energy products and microfinance initiatives while mitigating risks.

Leading Companies in the Global Sustainable Finance Market

Key players in the sustainable finance market are concentrating on adopting sustainable business practices to secure a competitive advantage. Organisations are prioritising sustainable finance to meet the rising demand for ESG-focused investments, address long-term environmental and social challenges, comply with regulations, improve their brand image, and capitalise on opportunities in the green economy to promote sustainability within the finance sector.

BlackRock, Inc.

Headquartered in New York, United States, BlackRock was established in 1988. It operates as a global investment management firm, providing a diverse array of financial services such as asset management, risk management, and advisory services. Renowned for its substantial size and influence, the firm oversees trillions of dollars in assets on a global scale.

State Street Corporation

Founded in 1792 and headquartered in Massachusetts, United States, State Street is a prominent financial services provider that specialies in investment management, servicing, and administrative solutions. Recognised for its custodian banking capabilities, the company collaborates with institutional investors around the world, managing assets for a diverse clientele.

Morgan Stanley

Established in 1935 and headquartered in New York, United States, Morgan Stanley is a multinational investment bank and financial services firm that offers wealth management, investment banking, and trading services. The company caters to a broad spectrum of clients, including corporations, governments, and individuals on a global basis.

UBS Group AG

UBS Group AG, founded in 1862 and headquartered in Zurich, Switzerland, is a global financial services organisation that delivers wealth management, investment banking, asset management, and retail banking services. The company has a worldwide presence, emphasising private banking and financial advisory services for both individuals and institutions.

Other major players in the global sustainable finance market are JPMorgan Chase & Co., Franklin Resources Inc., Amundi US, The Bank of New York Mellon Corporation, Deutsche Bank AG, and Goldman Sachs Group Inc., among others.