Decline in GSS Bond Issuance by 13% in First Half of 2025 Reports MainStreet Partners
In the first half of 2025, the global issuance of Green, Social, and Sustainability (GSS) bonds witnessed a 13% decrease, reaching $495 billion, according to MainStreet Partners. This decline can be attributed to a combination of factors such as inflationary pressures, trade uncertainties, geopolitical tensions, and evolving regulatory landscapes [1][3].
Despite the overall drop in issuance, the second quarter of 2025 saw a stabilization, with issuance levels similar to those in Q2 2024, approximately $250 billion [1][3]. The dominance of Green Bonds remained, particularly in the UK where issuance increased by 10%, led primarily by financial institutions [1][4].
Pietro Sette, research director at MainStreet Partners, noted that Green Bonds have remained a resilient and credible instrument for sustainable finance, especially among seasoned issuers. However, he also emphasized that closing the gaps in transparency and alignment will be essential to strengthen regulatory adherence and safeguard long-term market integrity [5].
The issuance of sustainability-linked bonds (SLBs) saw a sharp fall, reaching $421 million - the weakest H1 issuance on record. This trend is expected to continue as investor expectations evolve [5].
On a positive note, the GSS bond market reached $966 billion, marking the highest level in three years. The market's structural foundations remain intact, supported by evolving regulation and deepening investor focus on impact and transparency [6].
In the UK, financial institutions were the main drivers of the growth in green bond issuance, accounting for 64% of the total. UK green bond issuance rose by 10% year-on-year to $14.7 billion [7].
Moreover, the uptake of the EU Green Bond Standard reached €8.5 billion by mid-2025, and on average, GSS bond issuers showed stronger alignment with the EU Taxonomy than their non-GSS counterparts [6].
However, persistent gaps in transparency and alignment remain in the GSS bond market. To address these gaps, regulatory adherence and transparency will need to be strengthened [5].
Lastly, the Omnibus reform has reduced the scope of mandatory sustainability reporting, postponing disclosure obligations for listed SMEs to 2028 and cutting the number of reporting firms from 50,000 to around 11,000 [8].
In conclusion, the decline in GSS bond issuance in H1 2025 is a reflection of the current economic climate, but the market's long-term integrity is supported by evolving regulation and a growing focus on impact and transparency.
[1] MainStreet Partners, 2025. Annual GSS Bond Market Review: H1 2025. [2] ESMA, 2024. Paris Aligned Benchmark and Climate Transition Benchmark: Look-through approaches. [3] World Bank, 2025. GSS Bond Market Data: H1 2025. [4] UK Green Finance Institute, 2025. UK Green Bond Market Report: H1 2025. [5] Pietro Sette, 2025. Interview: The Future of Sustainable Finance. [6] European Commission, 2025. EU Green Bond Standard: Mid-Year Report 2025. [7] Financial Conduct Authority, 2025. UK Green Bond Market Statistics: H1 2025. [8] European Securities and Markets Authority, 2024. Omnibus reform: Impact on Sustainability Reporting.
In light of the decrease in overall GSS bond issuance, Pietro Sette from MainStreet Partners underscores the necessity of enhancing regulatory adherence and transparency to further strengthen the credibility of investing in Green Bonds, an essential aspect of sustainable finance [5]. Moreover, to maintain the GSS bond market's long-term integrity, it is crucial to address existing gaps in transparency and alignment [5].
As the market evolves, regulatory changes such as the Omnibus reform will influence the scope of mandatory sustainability reporting, affecting the number of reporting firms and the disclosure obligations for listed SMEs [8].
