global sustainable finance market size, sustainable finance market share, sustainable finance market trends, sustainable finance market outlook, sustainable finance market analysis, sustainable finance market scope
How big is the sustainable finance market today, and what are its future growth expectations?
The sustainable finance market size has grown exponentially in recent years. It will grow from $6718.2 billion in 2024 to $8272.7 billion in 2025 at a compound annual growth rate (CAGR) of 23.1%. The growth in the historic period can be attributed to a rise in investor demand and risk management, the rise of corporate social responsibility initiatives, increasing regulatory support, a rising focus on sustainable supply chains, and rising investments in renewable energy.
The sustainable finance market size is expected to see exponential growth in the next few years. It will grow to $18798.56 billion in 2029 at a compound annual growth rate (CAGR) of 22.8%. The growth in the forecast period can be attributed to a rising focus on reducing carbon footprint, growing demand for sustainable investments, growing awareness of sustainability among various sectors, growing demand for financial instruments and services, and increasing access to green bonds. Major trends in the forecast period include technological advancements, integration of artificial intelligence, green technology adoption, climate resilience financing, and sustainability-linked loans.
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What have been the primary factors driving the sustainable finance market’s growth?
The rise of corporate social responsibility initiatives is expected to propel the growth of the sustainable finance market going forward. Corporate social responsibility (CSR) refers to a business model where companies aim to positively impact society, the environment, and their stakeholders beyond just maximizing profits. The rise of corporate social responsibility initiatives is due to ethical responsibility, reputation and brand image, employee engagement and retention, risk management, and consumer expectations. The financial practices align with ethical, environmental, and social goals, CSR initiatives enhance corporate reputation, attract investment, and support the development of innovative financial products, contributing to a more sustainable and resilient global economy. For instance, in April 2022, according to the International Business Machines Corporation, a US-based technology company in a 2022 survey of 16,000 global consumers, more than half (51%) stated that environmental sustainability has become more important to them compared to 12 months ago. Therefore, the rise of corporate social responsibility initiatives is driving the growth of the sustainable finance market.
What are the key segments within the sustainable finance market?
The sustainable finance market covered in this report is segmented –
1) By Investment Type: Equity, Fixed Income, Mixed Allocation, Other Investment Types
2) By Transaction Type: Green Bond, Social Bond, Mixed-Sustainability Bond, Environmental, Social And Governance (ESG) Integrated Investment Funds, Other Transaction Types
3) By Investor Type: Institutional Investors, Retail Investors
4) ByIndustry Vertical: Utilities, Transport And Logistics, Chemicals, Food And Beverage, Government, OtherIndustry Verticals
Subsegments:
1) By Equity: Green Equity Investments, Socially Responsible Equity (SRI) Investments, Impact Equity Investments
2) By Fixed Income: Green Bonds, Social Bonds, Sustainability-Linked Bonds, Green Loan Instruments
3) By Mixed Allocation: ESG (Environmental, Social, Governance) Balanced Funds, Thematic Investment Funds (Climate Change, Clean Energy Funds), Sustainable Multi-Asset Funds
4) By Other Investment Types: Impact Investing, Community Investment Funds, Microfinance Investments, Carbon Credit Investments
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Which key players are shaping the sustainable finance market?
Major companies operating in the sustainable finance market are AXA Group, Bank of America Corporation, Citigroup Inc., The Hongkong and Shanghai Banking Corporation, BNP Paribas, Morgan Stanley Dean Witter Discover & Co., Internationale Nederlanden Group, Mitsubishi UFJ Financial Group, UBS Group AG, Goldman Sachs Group Inc., Barclays plc, Sumitomo Mitsui Financial Group Inc., Aviva plc, Credit Suisse Group AG, BlackRock Inc., Standard Chartered plc, Nomura Holdings Inc., Natixis SA, Northern Trust Corporation, Amundi SA, Macquarie Group Limited, Legal & General Group plc, State Street Global Advisors, Robeco
How will emerging trends drive the sustainable finance market throughout the forecast period?
Major companies operating in the sustainable finance market focus on adopting sustainable finance innovation to gain a competitive advantage. Sustainable finance innovation refers to developing and implementing new financial products, services, and strategies that incorporate environmental, social, and governance (ESG) criteria to promote sustainable development. For instance, in April 2024, Ernst & Young Global Limited, a UK-based transaction service company, launched a new Sustainable Finance Innovation Hub in Dublin to help financial institutions worldwide accelerate their efforts to meet their environmental, social, and governance (ESG) regulatory and reporting requirements. The hub aims to empower financial institutions to navigate the evolving landscape of sustainable finance and ESG compliance through specialized advisory services and expertise.
How do regional factors impact the sustainable finance market, and which region is the largest contributor?
North America was the largest region in the sustainable finance market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the sustainable finance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
What Does The Sustainable Finance Market Report 2025 Offer?
The sustainable finance market research report from The Business Research Company offers global market size, growth rate, regional shares, competitor analysis, detailed segments, trends, and opportunities.
Sustainable finance refers to the practice of incorporating environmental, social, and governance (ESG) criteria into financial decision-making processes, investment strategies, and lending activities. It aims to support economic growth while reducing environmental pressures, addressing social challenges, and promoting good governance practices. Sustainable finance seeks to align the financial system with sustainable development goals, ensuring that financial flows contribute to sustainable economic growth and the well-being of society and the environment.
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