Sustainable Finance Market & Regulatory Highlights | Q3 2026

Sustainable finance is maturing, entering a phase of consolidation, sophistication, and increasing regulatory alignment. Despite geopolitical tensions and higher interest rates, sustainable debt issuance remained resilient in Q3 2026.

Sustainable Finance Continues Its Evolution from Growth to Maturity

The third quarter of 2026 reinforced the trend that has been evident throughout the year: sustainable finance is maturing, entering a phase of consolidation, sophistication, and increasing regulatory alignment. In the last week of the quarter, Turkiye published its green taxonomy, largely inspired by the EU Taxonomy.

Sustainable Debt Issuance Remains Resilient

While overall issuance growth remained moderate, capital continued to flow toward green use-of-proceeds instruments. Global sustainable debt issuance remained resilient despite ongoing geopolitical tensions, higher and increasing interest rates, and uneven policy support across regions as in the previous quarters. Market forecasts continue to point toward a return to growth in 2026, with sustainable debt issuance expected to exceed 2025 levels.

Europe remains the dominant growth engine, while Asia-Pacific continues to drive innovation in transition finance and emerging sustainable finance themes such as blue finance and nature-related themes. North America remains subdued compared to previous years, despite capital flow directed toward AI infrastructure.

The latter is triggering interesting and dynamic discussions on asset-backed securities labelled transactions, and the minimum requirements for data centres to be considered as eligible assets under labelled debt. Developments in Europe (European Commission Public Consultation on minimum performance standards for data centres in Europe) and in the US (Moratorium on New Hyperscale Data Centers Launched in the New York State, first of its kind) will bring further views in the coming months to this portion of the market that attracts capital flow. Read our June publication: Greening Data Centres Through Sustainable Finance.

Transition attracted a couple of public issuances, but the wave of transition transactions is yet to be seen. Financial Institutions’ interest in the format remains strong, but the volume of issuances is still marginal. The potential for growth in the coming future is in all likelihood tied to targeted opportunities fitting the robust requirements of the Guidelines and Principles published last year, projects and issuers’ readiness as well as market appetite.

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