DATE PUBLISHED: May 6, 2025
May 2025 | Sustainable Finance Market Highlights
MARKET AND REGULATORY HIGHLIGHTS
- The year opened with a total of $221 billion in green, social and sustainability (GSS+) bond issuances for Q1 according to International Capital Markets Association (ICMA) data, a 16% increase from Q1 2024.
- This decrease in GSS+ bond issuances comes amid uncertain political and economic times, with markets having to recalibrate at pace. The ICMA reports that readjustment has taken place in a largely orderly manner in the fixed income space, with secondary markets remaining liquid, repo markets well-functioning and primary markets accessible.
- Q1 2025 saw the issuance of the first European Union Green Bonds (EU GBs), with companies such as A2A, Île-de-France Mobilités and ABN AMRO coming to market. While more actors are expected to tap the new markets in the coming weeks, the market on the whole remains in a “wait and see” mode, as forecasted by Responsible Investor late last year prior to the rollout of the standard (RI).
- The European Commission released an Omnibus package at the end of February with the goal of simplifying and reducing EU regulations, particularly those related to sustainability and investment. The package aims to streamline reporting requirements, reduce administrative burdens, and enhance competitiveness, with a focus on reducing burdens for SMEs (EU Commission).
- Potentially more relevant to the sustainable finance market, the EU Taxonomy is expected to receive some simplifications in the upcoming months, as the “Do No Significant Harm” principle will be examined more closely with the aim of streamlining some of the most challenging requirements. Also, we expect the introduction of criteria for “partial” alignment to the EU Taxonomy based on a future proposal by the Commission (EU Commission).
- Finally, in March 2025, the Monetary Authority of Singapore published an Information Note on the Application of the Singapore-Asia Taxonomy (SAT) in the Financial and Corporate Sectors, which shows the progress and how the SAT has been adopted by various market participants since its launch in December 2023 (Monetary Authority of Singapore).
