Sustainable Finance Market size was USD 6.4 trillion in 2024 and is expected to achieve a CAGR of more than 25% during the forecast period of 2024-2032, owing to increasing awareness among people and governments about environmental and social concerns.
Diversification within sustainable finance is a key constraint on sustainable finance market expansion. Diversification is the complexity and issues concerning the distribution of investment risk over different asset classes, sectors, geographies, and impact themes while keeping within ESG criteria. Sustainable finance investments often focus on specific industries, including clean technology, green infrastructure, and renewable energy. While these sectors have room to grow and also complement ESG goals, over-concentration in a single sector makes a portfolio vulnerable to risks inherent in the sector, which might impact the sector.
For instance, in September 2023, Singapore and China established a new green finance taskforce to strengthen their bilateral cooperation in green and transition finance. The taskforce, known as the China-Singapore Green Finance Taskforce (GFTF), aims to deepen collaboration between the two countries and facilitate greater public-private sector engagement in sustainable finance initiatives.
| Report Attribute | Details |
|---|---|
| Base Year | 2024 |
| Sustainable Finance Market Size in 2023 | USD 6.4 Trillion |
| Forecast Period | 2024-2035 |
| Forecast Period 2024-2032 CAGR | 25% |
| 2035 Value Projection | USD 38.71 Trillion |
| Historical Data for | 2021-2023 |
| No. of Pages | 340 |
| Tables, Charts & Figures | 360 |
| Segments covered | Investment Type, Transaction Type, Investor Type, and End-use |
| Growth Drivers |
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| Pitfalls & Challenges |
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Sustainable Finance Market Companies
Blackrock
HSBC Group
Deutsche Bank AG
Goldman Sachs
BNP Paribas
UBS
Bank of America
Sustainable Finance Industry News
In June 2024, Indosuez Funds introduced Chronos Green Bonds 2028, a fixed-term fund invested in green bonds issued by groups committed to working towards initiatives falling in line with the United Nations’ Sustainable Development Goals. It is an Article 9 investment according to the EU’s Sustainable Finance Disclosure Regulation (SFDR) and boasts a conservative risk profile, yielding returns while committing to a modest risk.
In January 2024, the State Bank of India raised USD 250 million by issuing green bonds that will fall due in December 2028. The proceeds of the green bond issuance will be utilized for financing eligible green projects in line with SBI’s ESG Financing Framework. This is in support of SBI’s sustainability goals and generating a positive environmental contribution.
Sustainable Finance Market Share
BNP Paribas, Deutsche Bank AG, Goldman Sachs and HSBC Group possess a market share of 7% in the sustainable finance sector. Goldman Sachs and Deutsche Bank AG are large financial players and have formulated several strategies to incorporate sustainable financing in their operations. Goldman Sachs has made major commitments to sustainable finance, such as a commitment to mobilize USD 750 billion by 2030. This commitment encompasses a number of projects, such as investments in vulnerable communities, clean transportation, and renewable energy projects.
Deutsche Bank has focused its sustainable finance efforts, by establishing a sustainable finance framework. The framework comprises guidelines, practices, and standards for evaluating and conducting transactions with the use of sustainable financing. Similar to Goldman Sachs, Deutsche Bank issues sustainable loans to its customers and green bonds. These financial instruments support projects such as sustainable agriculture, clean transport, and renewable energy that align with environmental sustainability objectives.
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