USD 703.1 billion
Sustainable Finance Market Size, Share, and Growth Analysis
Sustainable Finance Market By Investment Type (Equity, Fixed Income), By Transaction Type (Green bond, Social bond), By Investor Type (Institutional investors, Retail investors), By Industry Vertical, By Region - Industry Forecast 2025-2032
Report ID:
SQMIG40A2018 |
Region:
Global |
Published Date: February, 2025
Pages:
195
|Tables:
88
|Figures:
69
Format -
Sustainable Finance Market Insights
Global Sustainable Finance Market size was valued at USD 703.1 billion in 2023 and is poised to grow from USD 851.45 billion in 2024 to USD 3938.35 billion by 2032, growing at a CAGR of 21.1% during the forecast period (2025-2032).
Sustainable investments have demonstrated competitive financial performance and risk mitigation potential, attracting investors seeking financial returns and positive environmental and social impacts. In addition, technological advancements and data analytics have played a significant role in driving the market. The growing awareness and concern about environmental and social issues, such as climate change, resource depletion, and social inequality, is expected to boost the global sustainable finance market growth. However, the market is restrained by the lack of standardized and globally recognized definitions, metrics, and reporting frameworks for sustainability. This creates challenges in comparing and evaluating the sustainability performance of different companies and investment products. In addition, collaborations among financial institutions, industry associations, and regulatory bodies are working towards harmonizing sustainability reporting requirements and promoting the adoption of globally recognized frameworks. Investments in businesses with sustainable practices are rapidly growing as demand for finance professionals with expertise in sustainable finance is a rapidly growing field. In addition, sustainable finance offers cost cutting and risk mitigation along with better returns.
Green banks restrict their business transactions to those business entities who qualify screening process done by green banks. With the limited number of customers, they will have a smaller base to support them. In addition, credit risks arise due to lending to those customers whose businesses are affected by the cost of pollution, changes in environmental regulations, and new requirements on emissions levels. It is higher due to the probability of customer default as a result of uncalculated expenses for capital investment in production facilities, loss of market share and third-party claims. Therefore, this is a major limiting factor for the growth of the global sustainable finance market outlook.
Market snapshot - 2025-2032
Global Market Size
Largest Segment
Institutional Investors
Fastest Growth
Retail Investors
Growth Rate
21.1% CAGR
Global Sustainable Finance Market ($ Bn)
Country Share for North America Region (%)
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Sustainable Finance Market Segments Analysis
Global Sustainable Finance Market is segmented by Investment Type, Transaction Type, Investor Type, Industry Vertical and region. Based on Investment Type, the market is segmented into Equity, Fixed Income, Mixed allocation and Others. Based on Transaction Type, the market is segmented into Green bond, Social bond, Mixed- sustainability bond, ESG Integrated Investment Funds and Others. Based on Investor Type, the market is segmented into Institutional investors and Retail investors. Based on Industry Vertical, the market is segmented into Utilities, Transport & logistics, Chemicals, Food and beverage, Government and Others. Based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America and Middle East & Africa.
Analysis by Offering
As per global sustainable finance market outlook, the equities segment dominated the market in 2024 and accounted for a revenue share of more than 48.0%. Equities allow investors to actively engage in sustainable investing and support companies that demonstrate strong ESG practices. Moreover, equities offer a higher liquidity level than other asset classes in the sustainable finance industry. Investors can easily buy and sell equity securities, allowing for greater flexibility and responsiveness to market conditions. This liquidity makes equities an attractive choice for both institutional and individual investors seeking exposure to sustainable investments.
As per global sustainable finance market forecast, the multi-asset segment is anticipated to register significant growth during the forecast period. Multi-asset strategies offer investors diversification across different asset classes, including equities, fixed income, real estate, and alternative investments. This diversification helps mitigate risk and provides a more balanced portfolio, appealing to investors seeking a comprehensive approach to sustainable investing. Moreover, multi-asset strategies allow for flexible capital allocation to various sustainable investment opportunities.
Analysis by Investor Type
The institutional investors segment dominated the market in 2024 and accounted for a global revenue share of over 78.0%. Institutional investors, such as pension funds, sovereign wealth funds, and insurance companies, play a crucial role in driving sustainable investment practices. This dominance is driven by their significant financial resources, long-term investment strategies, and growing commitment to Environmental, Social, and Governance (ESG) principles. These investors prioritize sustainable investments to mitigate risks, improve returns, and align with regulatory and stakeholder expectations. Institutional investors increasingly recognize the importance of integrating ESG factors into their investment decisions to manage risks and achieve sustainable long-term returns.
The retail investors segment is anticipated to register significant growth during the forecast period. Retail investors, which include individual investors, high-net-worth individuals, and retail investment funds, are increasingly becoming aware of the importance of sustainable investing and seeking investment opportunities aligned with their values and sustainability goals. There is a rising awareness of the environmental and social challenges faced by the world, such as climate change and social inequality, which has led individuals to seek investment options that can make a positive impact. In addition, technological advancements and increased accessibility to information have empowered retail investors to research and access sustainable investment products easily.
Global Sustainable Finance Market By Investor Type (%)
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Sustainable Finance Market Regional Insights
North America dominated the sustainable finance market due to a combination of regulatory advancements, corporate initiatives, and investor awareness. The region boasts a robust financial infrastructure, with leading institutions like BlackRock, JPMorgan Chase, and Goldman Sachs driving ESG integration. Policies promoting renewable energy, carbon neutrality, and green bonds further encourage sustainable investments. Moreover, a growing number of investors in the United States and Canada prioritize ESG criteria, driving demand for sustainability-linked financial products. Corporate sustainability efforts and a thriving green technology sector also bolster North America’s leadership in this market.
Asia Pacific is anticipated to emerge as the fastest-growing region from 2025 to 2032. There is a growing recognition among businesses and governments in the region about the importance of sustainable development and addressing environmental and social challenges. Countries like China, Japan, and South Korea have implemented ambitious sustainability goals and initiatives, creating a conducive environment for sustainable finance to thrive. Moreover, there is an increasing awareness and demand for sustainable investment products among investors in the Asia Pacific region.
Global Sustainable Finance Market By Geography
- Largest
- Fastest
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Sustainable Finance Market Dynamics
Drivers
Growing Investments in Businesses with Sustainable Practices
- The rise in investment in businesses with sustainable practices is a driving force behind the growth of the sustainable finance market. Investors increasingly recognize the importance of addressing environmental and social challenges and seek investment opportunities that promote sustainable development. Companies with sustainable practices prioritize environmental stewardship, social responsibility, and good governance, thereby reducing their negative impact on the planet and society while striving for long-term profitability.
Growing Awareness of Sustainability Among Various Sectors
- Sustainability is an increasingly important issue for many people, especially in the business world. For business owners, leaders, and administrators, sustainable business practices are becoming imperative. Human industry is a big part of climate change because of its reliance on land, resources, fossil fuels, and non-stop production and consumption. Therefore, growing awareness about sustainability among various sectors is expected to propel investors to make investment in businesses which are more sustainable and consider the ESG reliance.
Restraints
Lack of Standardized ESG Metrics
- The absence of universal standards and frameworks for measuring Environmental, Social, and Governance (ESG) performance is a critical barrier in the sustainable finance market. This lack of uniformity makes it challenging for investors to compare and evaluate different sustainable investment opportunities. As a result, the inconsistent metrics often lead to confusion, reduced investor confidence, and hesitation in embracing sustainable finance fully.
High Implementation Costs
- Transitioning to sustainable finance involves substantial financial commitments for businesses. These include adopting clean technologies, adhering to complex regulatory standards, and ensuring transparent ESG disclosures. For smaller companies and organizations with limited budgets, these high upfront and operational costs act as a significant barrier, discouraging participation and stalling the widespread adoption of sustainable finance practices.
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Sustainable Finance Market Competitive Landscape
The competitive landscape of the global sustainable finance industry is rapidly evolving, driven by growing investor demand for environmentally and socially responsible investment opportunities. The market is dominated by a mix of global financial institutions, asset management firms, and specialized sustainability-focused funds. Leading players such as BlackRock, Inc., Goldman Sachs Group, Inc., HSBC Holdings plc, and JPMorgan Chase & Co. have taken proactive steps to incorporate environmental, social, and governance (ESG) criteria into their investment strategies.
Top Player’s Company Profiles
- JPMorgan Chase & Co
- Morgan Stanley
- BlackRock
- Refinitiv
- Acuity Knowledge Partners
- NOMURA HOLDINGS, INC
- Aspiration Partners, Inc.
- Bank of America
- BNP Paribas
- Deutsche Bank AG
- Goldman Sachs
- HSBC Group
Recent Developments
- In August 2023, Refinitiv launched a new ESG scoring service that leverages artificial intelligence and natural language processing to provide investors with more comprehensive and transparent ESG data and insights.
- In July 2023, BlackRock acquired Vanguard Renewables, a leading developer of farm-based renewable natural gas projects, as part of its strategy to invest in climate solutions and support the transition to a low-carbon economy.
- In March 2023, Nomura Holdings issued its first sustainability-linked bond of USD 500 million, which links the coupon rate to the bank’s performance on three sustainability indicators: greenhouse gas emissions, renewable energy financing, and gender diversity.
Sustainable Finance Key Market Trends
- ESG Integration as a Foundation for Resilient and Competitive Finance: Environmental, social, and governance (ESG) integration is now a bedrock in financial decision-making, establishing itself as a standard practice embraced by both investors and financial institutions. This shift underscores a growing recognition of the material impact ESG factors can have on financial performance and the broader sustainability landscape. By embedding ESG considerations into decision-making processes, organizations are not only aligning with global sustainability goals but also enhancing their resilience and competitiveness in a rapidly changing market landscape.
- Rise of Green Bonds and Sustainable Debt: Green bonds and sustainable debt instruments are experiencing a surge in popularity, responding to the increasing preference of businesses and governments for financing options aligned with environmentally friendly and socially responsible projects. This global sustainable finance market trend reflects a concerted effort to direct capital towards initiatives that contribute positively to the planet and society.
Sustainable Finance Market SkyQuest Analysis
SkyQuest’s ABIRAW (Advanced Business Intelligence, Research & Analysis Wing) is our Business Information Services team that Collects, Collates, Co-relates, and Analyses the Data collected by means of Primary Exploratory Research backed by the robust Secondary Desk research.
According to SkyQuest analysis, investments in businesses with sustainable practices is rapidly growing as demand for finance professionals with expertise in the sustainable finance is a rapidly growing field. In addition, sustainable finance offers cost cutting and risk mitigation along with better returns. Moreover, there is a decreased exposure to sustainability related risks. Therefore, these are some of the factors propelling the growth of the sustainable finance market. However, diversification issues of sustainable finance and its high operating costs are a major factors limiting the growth of the sustainable finance market. On the contrary, growing awareness about sustainability among various sectors is expected to provide lucrative sustainable finance market opportunity in the upcoming years.
| Report Metric | Details |
|---|---|
| Market size value in 2023 | USD 703.1 billion |
| Market size value in 2032 | USD 3938.35 billion |
| Growth Rate | 21.1% |
| Base year | 2024 |
| Forecast period | 2025-2032 |
| Forecast Unit (Value) | USD Billion |
| Segments covered |
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| Regions covered | North America (US, Canada), Europe (Germany, France, United Kingdom, Italy, Spain, Rest of Europe), Asia Pacific (China, India, Japan, Rest of Asia-Pacific), Latin America (Brazil, Rest of Latin America), Middle East & Africa (South Africa, GCC Countries, Rest of MEA) |
| Companies covered |
|
| Customization scope | Free report customization with purchase. Customization includes:-
|
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Table Of Content
Executive Summary
Market overview
- Exhibit: Executive Summary – Chart on Market Overview
- Exhibit: Executive Summary – Data Table on Market Overview
- Exhibit: Executive Summary – Chart on Sustainable Finance Market Characteristics
- Exhibit: Executive Summary – Chart on Market by Geography
- Exhibit: Executive Summary – Chart on Market Segmentation
- Exhibit: Executive Summary – Chart on Incremental Growth
- Exhibit: Executive Summary – Data Table on Incremental Growth
- Exhibit: Executive Summary – Chart on Vendor Market Positioning
Parent Market Analysis
Market overview
Market size
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- SWOT Analysis
KEY MARKET INSIGHTS
- Technology Analysis
- (Exhibit: Data Table: Name of technology and details)
- Pricing Analysis
- (Exhibit: Data Table: Name of technology and pricing details)
- Supply Chain Analysis
- (Exhibit: Detailed Supply Chain Presentation)
- Value Chain Analysis
- (Exhibit: Detailed Value Chain Presentation)
- Ecosystem Of the Market
- Exhibit: Parent Market Ecosystem Market Analysis
- Exhibit: Market Characteristics of Parent Market
- IP Analysis
- (Exhibit: Data Table: Name of product/technology, patents filed, inventor/company name, acquiring firm)
- Trade Analysis
- (Exhibit: Data Table: Import and Export data details)
- Startup Analysis
- (Exhibit: Data Table: Emerging startups details)
- Raw Material Analysis
- (Exhibit: Data Table: Mapping of key raw materials)
- Innovation Matrix
- (Exhibit: Positioning Matrix: Mapping of new and existing technologies)
- Pipeline product Analysis
- (Exhibit: Data Table: Name of companies and pipeline products, regional mapping)
- Macroeconomic Indicators
COVID IMPACT
- Introduction
- Impact On Economy—scenario Assessment
- Exhibit: Data on GDP - Year-over-year growth 2016-2022 (%)
- Revised Market Size
- Exhibit: Data Table on Sustainable Finance Market size and forecast 2021-2027 ($ million)
- Impact Of COVID On Key Segments
- Exhibit: Data Table on Segment Market size and forecast 2021-2027 ($ million)
- COVID Strategies By Company
- Exhibit: Analysis on key strategies adopted by companies
MARKET DYNAMICS & OUTLOOK
- Market Dynamics
- Exhibit: Impact analysis of DROC, 2021
- Drivers
- Opportunities
- Restraints
- Challenges
- Exhibit: Impact analysis of DROC, 2021
- Regulatory Landscape
- Exhibit: Data Table on regulation from different region
- SWOT Analysis
- Porters Analysis
- Competitive rivalry
- Exhibit: Competitive rivalry Impact of key factors, 2021
- Threat of substitute products
- Exhibit: Threat of Substitute Products Impact of key factors, 2021
- Bargaining power of buyers
- Exhibit: buyers bargaining power Impact of key factors, 2021
- Threat of new entrants
- Exhibit: Threat of new entrants Impact of key factors, 2021
- Bargaining power of suppliers
- Exhibit: Threat of suppliers bargaining power Impact of key factors, 2021
- Competitive rivalry
- Skyquest special insights on future disruptions
- Political Impact
- Economic impact
- Social Impact
- Technical Impact
- Environmental Impact
- Legal Impact
Market Size by Region
- Chart on Market share by geography 2021-2027 (%)
- Data Table on Market share by geography 2021-2027(%)
- North America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- USA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Canada
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Europe
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Germany
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Spain
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- France
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- UK
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Europe
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Asia Pacific
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- China
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- India
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Japan
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Korea
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of Asia Pacific
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Latin America
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- Brazil
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of South America
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Middle East & Africa (MEA)
- Chart on Market share by country 2021-2027 (%)
- Data Table on Market share by country 2021-2027(%)
- GCC Countries
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- South Africa
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
- Rest of MEA
- Exhibit: Chart on Market share 2021-2027 (%)
- Exhibit: Market size and forecast 2021-2027 ($ million)
KEY COMPANY PROFILES
- Competitive Landscape
- Total number of companies covered
- Exhibit: companies covered in the report, 2021
- Top companies market positioning
- Exhibit: company positioning matrix, 2021
- Top companies market Share
- Exhibit: Pie chart analysis on company market share, 2021(%)
- Total number of companies covered
Methodology
For the Sustainable Finance Market, our research methodology involved a mixture of primary and secondary data sources. Key steps involved in the research process are listed below:
1. Information Procurement: This stage involved the procurement of Market data or related information via primary and secondary sources. The various secondary sources used included various company websites, annual reports, trade databases, and paid databases such as Hoover's, Bloomberg Business, Factiva, and Avention. Our team did 45 primary interactions Globally which included several stakeholders such as manufacturers, customers, key opinion leaders, etc. Overall, information procurement was one of the most extensive stages in our research process.
2. Information Analysis: This step involved triangulation of data through bottom-up and top-down approaches to estimate and validate the total size and future estimate of the Sustainable Finance Market.
3. Report Formulation: The final step entailed the placement of data points in appropriate Market spaces in an attempt to deduce viable conclusions.
4. Validation & Publishing: Validation is the most important step in the process. Validation & re-validation via an intricately designed process helped us finalize data points to be used for final calculations. The final Market estimates and forecasts were then aligned and sent to our panel of industry experts for validation of data. Once the validation was done the report was sent to our Quality Assurance team to ensure adherence to style guides, consistency & design.
Analyst Support
Customization Options
With the given market data, our dedicated team of analysts can offer you the following customization options are available for the Sustainable Finance Market:
Product Analysis: Product matrix, which offers a detailed comparison of the product portfolio of companies.
Regional Analysis: Further analysis of the Sustainable Finance Market for additional countries.
Competitive Analysis: Detailed analysis and profiling of additional Market players & comparative analysis of competitive products.
Go to Market Strategy: Find the high-growth channels to invest your marketing efforts and increase your customer base.
Innovation Mapping: Identify racial solutions and innovation, connected to deep ecosystems of innovators, start-ups, academics, and strategic partners.
Category Intelligence: Customized intelligence that is relevant to their supply Markets will enable them to make smarter sourcing decisions and improve their category management.
Public Company Transcript Analysis: To improve the investment performance by generating new alpha and making better-informed decisions.
Social Media Listening: To analyze the conversations and trends happening not just around your brand, but around your industry as a whole, and use those insights to make better Marketing decisions.
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