MainStreet Partners has released its summer edition of “GSS Bonds Market Trends Report,” revealing a 13% year-on-year decline in global Green, Social, and Sustainability (GSS) bond issuance for the first half of 2025, reaching a total of $495 billion.
However, issuance in Q2 2025 reached the same levels seen in Q2 2024, around the $250bn mark.
GSS Bonds Market Trends Report, July ’25 by MainStreet Partners
A mix of macroeconomic factors including inflationary pressures, trade uncertainty, and geopolitical tension has created a more cautious environment for both issuers and investors over the first half of 2025, finds the report.
The H1 2025 report also found that Green Bonds remain dominant, particularly in UK, where issuance rose by 10% compared to 2024 ($13.3 billion) to $14.7 billion this year. Financial institutions accounted for 64% of these issuances – up from 50% in 2024 and almost double the global average – reflecting the increasing role of UK-based banks and insurers in sustainable finance.
The supply of Sustainability ($131bn) and Social Bonds ($82bn) remained stable in the first half of 2025.
But Sustainability-Linked Bond supply remains down compared to previous years, having the weakest H1 issuance on record at $421mln in 2025.
Other Findings from the Repo:
- GSS Bond issuers show stronger EU Taxonomy Eligibility (43%) and Alignment (15%) than non-GSS peers (31% and 9% respectively).
- EU Green Bond Standard reached EUR 8.5bn in issuance by mid-2025, with strong participation from supranational and public entities.
- The Omnibus reform has significantly reduced the scope of mandatory sustainability reporting under CSRD, postponing disclosure obligations for listed SMEs to 2028 and cutting the number of reporting firms from 50,000 to around 11,000.
- Utilities and Real Estate Management and Development lead in EU Taxonomy Alignment, with Utilities leading in revenue alignment at 44% and Real Estate leading in eligibility at 89% (though only 30% of that Revenue on average aligns with the Taxonomy). Utilities also lead in Capex Alignment at 73%.
Pietro Sette, Research Director at MainStreet Partners, commented on the report:
“Despite a tougher macroeconomic backdrop, Green Bonds have remained a resilient and credible instrument for sustainable finance, especially among seasoned issuers who are increasingly using GSS bonds to finance activities that meet rigorous criteria.
“Our latest data shows that GSS Bonds continue to channel capital toward more Taxonomy-aligned economic activities. However, persistent gaps in transparency and alignment remain. As investor expectations evolve, closing these gaps will be essential to strengthen regulatory adherence and safeguard long-term market integrity.”
The GSS Bonds Market Trends Report – Summer Edition, July 2025 offers a comprehensive mid-year snapshot of the global Green, Social and Sustainability (GSS) Bond market. The report explores how issuers, investors and regulators are navigating a more cautious macroeconomic environment while continuing to trust and contribute to the sustainable fixed income market.
Drawing on proprietary ESG and Sustainability Ratings, Taxonomy Alignment metrics, and impact data covering over 5,000 GSS bonds, the report assesses the evolving regulatory landscape in both the European Union, including implications of the EU Green Bond Standard and the CSRD-related Omnibus package.
