ESG Bond & Loan Issuance Hits Lowest Since Q1 2022 Amid Market Decline
European sustainable finance markets face headwinds as Q1 2025 ESG bond and loan issuance plunges 27% year-over-year to €169bn—the weakest first-quarter performance since 2022. Sustainability-linked loans bear the brunt with volumes nearly halved, while green bonds remain the dominant category despite a 19% contraction.
Italy emerges as the regional leader with €29bn in total ESG origination, accounting for 54% of sustainability-linked bonds. The EU Green Bond Standard marks its debut with inaugural issuances from Île-de-France Mobilités, ABN AMRO, and A2A SpA, though ESG's share of total European bond issuance shrinks to 12.5% from 2020's peak of 17%.