Global sustainable finance issuance is expected to reach about $1.62 trillion in 2026, according to ING, up from $1.56 trillion in 2025 but still below the $1.67 trillion recorded in 2024. ING says the market entered 2026 with a relatively strong start, including about $257 billion issued in the first two months of the year, suggesting that sustainable finance remains active despite policy uncertainty and shifting regional conditions.

The forecast matters because it points to a market that is no longer expanding in a straight line, but is still proving more durable than many expected. Sustainable finance is not returning through uniform global momentum. It is returning through a changing mix of regions, issuers, and products, with some markets accelerating and others retreating. That makes 2026 less a story of broad-based recovery and more a story of selective resilience.

Growth Returns, but the Market Looks Different

ING’s latest outlook suggests that issuance growth in 2026 will be driven primarily by green bonds and green loans, rather than by a broad rise across all sustainable debt categories. The bank expects green bond issuance to reach around $700 billion and green loan issuance to hit roughly $255 billion, indicating that environmental financing tools with clearer standards and use-of-proceeds structures remain the market’s strongest anchors.

That shift is important because it shows where market confidence is concentrating. Issuers and investors appear to be favoring instruments that are easier to structure, easier to explain, and more clearly tied to capital spending on environmental projects. In practical terms, the sustainable finance market is becoming more disciplined. It is not disappearing, but it is becoming more selective about which products are likely to keep growing. This is an inference based on ING’s product-level issuance expectations.

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Europe Still Dominates, but the Internal Map Is Changing

Europe, the Middle East, and Africa are expected to remain the largest sustainable finance region in 2026, supported by refinancing activity and continued investment in clean energy. At the same time, ING notes that corporate issuance in the region has moderated somewhat, while Central and Eastern Europe is becoming a stronger source of growth, led mainly by sovereign issuers and state-owned corporates.

This matters because it suggests the center of sustainable finance activity within Europe is starting to shift. The market is no longer driven only by the traditional large corporate issuers in Western Europe. More of the momentum is now coming from public-sector and quasi-public borrowers in parts of the region where energy transition investment and infrastructure financing needs remain high. That shift could make the market more policy-led and more closely tied to state-backed transition strategies over the next several years. This is an inference based on ING’s regional observations.

The US Is Dragging on Global Supply

ING says the United States recorded the largest drop in global sustainable finance supply, driven by political and regulatory uncertainty. The report points to cuts in tax incentives and funding, regulatory rollback, and the abandonment of efforts to mandate climate reporting and federal DEI actions as factors causing issuers to take a more cautious stance.

That decline is significant because the US had long been expected to remain one of the major contributors to future sustainable finance growth, especially through large corporate and project-linked issuance. Instead, policy instability appears to be weakening confidence and reducing new supply. The broader implication is that sustainable finance growth in 2026 is happening despite the US environment, not because of it.

Asia Pacific Is Becoming a More Reliable Growth Story

In contrast, Asia Pacific is showing steadier momentum. ING says the region delivered decent growth and that 2025 finished roughly in line with the prior year, with green bonds and green loans as the main growth engines. Financial institutions and corporates led issuance, while governments and supranationals showed a modest decline. ING expects more growth from Asia Pacific in 2026 and potentially a pickup in transition issuance as policy frameworks continue to develop.

This is important because Asia Pacific increasingly looks like the region where sustainable finance growth may be broadening in a more commercially durable way. Instead of depending mainly on sovereign frameworks or regulation-heavy reporting environments, issuance is being driven by financial institutions and companies that are actively using green instruments to fund transition-related investment. That suggests the region could become a more important engine of market expansion if current policy development continues. This is an inference based on ING’s regional comments.

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Corporate Commitment Has Not Disappeared

ING also notes that many corporates remain committed to decarbonization and climate risk management, with 2030 targets still in place for a large share of issuers. Governments, meanwhile, are increasingly using sustainable finance to fund energy transition initiatives, even if the broader issuance pattern is becoming more uneven.

That point matters because it helps explain why the market is still expected to recover in 2026 despite policy headwinds and regional fragmentation. The market is being sustained by the fact that many transition needs have not gone away. Electrification, power infrastructure, energy efficiency, real estate adaptation, and decarbonization investment still require capital, and sustainable finance remains one of the clearer ways to organize that funding.

The Market Is Recovering, but Its Composition Is Shifting

The main takeaway from ING’s forecast is not simply that issuance will rise to $1.62 trillion. It is that the shape of the market is changing while it grows. Europe still leads, but parts of that growth are moving eastward. Asia Pacific is becoming more important. The United States is contributing less. Green bonds and green loans are carrying more of the market, while other instruments appear less central to the rebound.

That makes 2026 an important year for sustainable finance. It is not a return to the earlier assumption of smooth, universal growth. It is the start of a more fragmented and selective expansion, where the market continues to deepen, but with sharper differences by region, policy environment, and product type. For issuers and investors, that means the opportunities remain substantial, but the map is becoming more uneven and more strategic than before.

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