October 2025 | Sustainable Finance Market Highlights

Market and Regulatory Highlights

• The third quarter of the year registered a total of $135 billion in green, social and sustainability (GSS+) bond issuances—a 26% decrease from Q2 (Environmental Finance).
• The past quarter saw the continued dominance of corporate issuers in GSS+ bond issuances; corporate issuers accounted for $46 billion of total issuances, while the activity of financial institutions slowed to only $22 billion of Q3 issuances versus $42 billion in Q2 (Environmental Finance).
• The quarter was relatively quiet in terms of market updates, following the release of several guidance documents and updates to existing publications by the International Capital Market Association (ICMA) just before the summer. Nevertheless, the following announcements were made:

• • In July, the EU Commission proposed an amendment to the European Climate Law to set an EU climate target for 2040, aiming to reduce the EU’s net greenhouse gas (GHG) emissions by 90% relative to 1990 (EU Commission).
  • The EU Commission presented a voluntary sustainability reporting standard aimed at easing the burden on small- and medium-sized enterprises (SMEs). The recommendation introduces a voluntary standard to help SMEs not covered by the Corporate Sustainability Reporting Directive (CSRD) to respond to sustainability information requests from large companies and financial institutions more easily (EU Commission).
  • The Science-Based Targets initiative (SBTi) published the results of an internal study finding that the number of companies setting both near-term and net-zero targets more than tripled (227% growth) in the past 18 months. Asia emerged as the frontrunner, with the number of validated companies in the region increasing by 134% (SBTI).
  • The International Court of Justice (ICJ) released its Advisory Opinion on climate change, affirming that states have legal obligations to address climate change and may face consequences for failing to take adequate action (ICJ).
  • At the beginning of September, ISO and the GHG Protocol announced a strategic partnership to deliver unified global standards for GHG emissions accounting. This represents an important shift toward integration and co-development, helping users to rely on a unified framework and reducing confusion in the market (ISO).