Global issuance of sustainable bonds is expected to reach around $900 billion in 2026, according to new forecasts from Moody’s Ratings. The projection suggests volumes will remain broadly in line with 2025 levels, but still below the highs recorded between 2021 and 2024, reflecting a market adjusting to shifting political priorities and a more complex macroeconomic environment.

Sustainable bonds, which include green, social, sustainability, and transition bonds, are issued to finance projects with environmental and social objectives. While the asset class remains firmly established, Moody’s sees 2026 as a year of consolidation rather than renewed acceleration.

A Plateau After the Post-Pandemic Peak

Moody’s attributes the expected flat trajectory to a combination of regional divergence and competing global priorities. In particular, the agency points to a sharp decline in sustainable bond issuance in North America. Issuance in the United States and Canada fell to $67 billion in 2025, down from $175 billion in 2021, as political scrutiny of ESG and a renewed focus on energy security and defence spending weighed on demand.

As a result, global issuance volumes in 2026 are expected to remain below the levels seen during the pandemic and immediate post-pandemic period, when stimulus measures and social financing needs drove record activity.

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Green Bonds Remain the Market Anchor

Green bonds are forecast to continue dominating the sustainable bond market. Moody’s expects green bond issuance to reach $530 billion in 2026, accounting for close to 60 percent of total global sustainable bond volumes. The resilience of green bonds reflects continued investment needs in renewable energy, clean transport, and energy efficiency, even as broader ESG sentiment varies by region.

Social bonds are projected to total $115 billion in 2026. While this represents a modest increase compared with preliminary 2025 figures, it remains well below the pandemic-era peak of 2021, when governments and multilateral institutions issued heavily to support health systems and social programmes.

Sustainability and Transition Bonds Show Resilience

Sustainability bonds, which finance a combination of environmental and social projects, are expected to reach $190 billion in 2026, broadly unchanged from 2025. Moody’s notes that this category has proven more resilient than social bonds, benefiting from its flexibility and appeal to issuers seeking to address multiple objectives within a single framework.

Transition bonds are identified as a growing segment of the market. Moody’s forecasts issuance to nearly double to $40 billion in 2026, supported by the emergence of clearer industry standards and a more pragmatic investor focus on decarbonising hard-to-abate sectors such as heavy industry, transport, and energy-intensive manufacturing.

Digital Infrastructure Emerges as a New Driver

Beyond traditional climate and social assets, Moody’s highlights digital infrastructure as an increasingly important source of sustainable debt issuance. With electricity consumption from data centres expected to rise by 14 percent in 2026, the agency anticipates new bond supply from technology companies and data centre operators.

These issuances are likely to focus on financing energy-efficient facilities, low-carbon power supply, and water infrastructure, reflecting the growing intersection between digitalisation, energy demand, and sustainability objectives.

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Europe Strengthens Its Lead

Europe is expected to extend its position as the world’s largest sustainable bond market. European issuance reached $379 billion in 2025, representing around 47 percent of global volumes. Asia-Pacific remains the second-largest region, with $172 billion of issuance recorded in 2025.

A separate outlook from SEB points to even stronger momentum in Europe. SEB expects European green bond issuance alone to reach a record $370 billion in 2026, driven by the need to strengthen domestic energy supply, reduce reliance on imports, and improve infrastructure resilience amid rising electricity demand.

While Moody’s cautions that energy security concerns could distract from sustainable finance globally, SEB argues that in Europe these pressures are acting as catalysts rather than constraints. SEB data show that total European issuance across green, sustainable, sustainability-linked, and transition bonds reached $464 billion in 2025.

The Refinancing Test Ahead

Moody’s also highlights a potential upside to its 2026 forecast. Around $520 billion of labelled sustainable bonds are due to mature in 2026, creating a significant refinancing moment for the market. Whether issuers choose to roll over these bonds with new sustainable labels will be a key test of long-term commitment to the market.

As the sustainable bond market enters a more mature phase, 2026 is shaping up less as a year of rapid expansion and more as a test of resilience. The balance between political pressure, infrastructure investment needs, and issuer refinancing decisions will determine whether global volumes merely hold steady or begin a new growth cycle.

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