Fwd: A good year for green bonds

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Loretta Lohman

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Dec 26, 2025, 10:28:26 AM (3 days ago) Dec 26

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Global green debt sales hit a record this year, driven in part by demand for clean power and grid upgrades to feed AI data centers. Today’s newsletter delves into how the market did in 2025 and whether the good times will last.

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Blockbuster year

By Ishika Mookerjee

Investors have piled into climate-friendly assets this year despite policy and regulatory rollbacks in the US and Europe, as artificial intelligence drives a boom in energy infrastructure demand.

Global green bond and loan issuance has reached a record $947 billion so far this year, according to data compiled by Bloomberg Intelligence. That’s as stock market gauges for renewables are set for their first annual gains since 2020, outperforming the S&P 500 by a wide margin, while shares of power-grid technology companies remain in favor.

The flows are notable in a year when US President Donald Trump backed fossil fuels and dismantled clean-energy subsidies and legislation. Europe also has rolled back some of its toughest environmental rules amid concerns about growth and competitiveness.

Still, clearer policy signals and an almost 4% expected increase in global electricity demand, driven by AI, cooling and electrification needs, are lifting investor optimism.

“Green investments are increasingly becoming viewed as core infrastructure and industrial plays, not just niche ESG trades,” said Melissa Cheok, associate director for ESG investment research at Sustainable Fitch. “Capital is likely flowing toward areas with clear revenue visibility, policy backing and structural demand such as grid upgrades and renewables tied to electrification.”

Asia-Pacific companies and government-linked issuers raised $261 billion from green debt, up about 20% from a year earlier, with China and India backing the rollout of renewables, according to Bloomberg Intelligence. China had a record $138 billion in green bond issuance, led by its biggest lenders. It also debuted a sovereign offering in London earlier this year.

The so-called greenium — the lower borrowing costs on green bonds — is most evident in Asia-Pacific, with some issuers getting more than a 14-basis-point discount for using a green label in November, according to BloombergNEF. Green bonds are often used by companies to raise money for switching to renewable energy or lower-carbon transportation.

BNP Paribas SA and Credit Agricole SA are this year’s leading underwriters of green bonds, according to data compiled by Bloomberg. The amount of outstanding green bonds has grown at a 30% compound annual rate over the past five years and issuance now accounts for about 4.3% of the global total, LSE Group researchers said last month.

Easing US interest rates and refinancing needs may boost global green bond sales to as much as $1.6 trillion next year, said Crystal Geng, environmental, social and governance research lead for Asia at BNP Paribas Asset Management.

Green stocks have been a market leader this year. Clean-energy indexes from S&P Dow Jones Indices and WilderShares have surged 45% and 60%, respectively, though both remain below their 2021 peaks.

Read the full story for more on green bonds and the outlook going forward.

Snow in the city

By Naureen S Malik

A winter storm is threatening to drop heavy snow on New York City and surrounding areas, potentially snarling post-Christmas holiday weekend travel.

The city’s five boroughs, Westchester, southern Connecticut and northeastern New Jersey may see snow accumulations between 4 inches (10.2 centimeters) and 8 inches as the storm moves through the area from Friday at about 4 p.m. through the following day at 1 p.m., according to the National Weather Service. New York City issued a travel advisory for the duration of the storm as cold temperatures limit snowmelt, increasing the risk of slippery and hazardous road conditions.

A Holiday Market at near Radio City Music Hall. Photographer: Angela Weiss/AFP

“The hazardous conditions could impact the Friday evening commute,” the weather service said in the notice issued on Thursday.

The winter watch extends into Philadelphia with the storm expected to move offshore into the mid-Atlantic by Saturday morning, the service said. Wintry precipitation will give way to freezing rain as the storm moves south.

A potentially stronger cold front will move across the Northeast, including the Washington area, toward the end of the weekend, which could lead to blustery conditions during the last few days of the year.

Bygone boom years

$9.7 billion

The amount of green bonds sold in the US in 2021, a record high. It's been tougher sledding since then, particularly this year.

A strong signal

"The growth in both the volume and fees suggests that despite macroeconomic uncertainties, low-carbon solutions are expanding on cost competitiveness."

Jonathan Luan

Analyst, BloombergNEF

Banks are earning more fees providing green project financing compared to fossil fuels.

Best of Green: EVs surprising rise

Something remarkable is unfolding in developing countries. From Nepal to Costa Rica, more people are buying electric cars than fossil-fuel vehicles, as battery prices plummet and cheap home-grown EVs come to market. And in China, more electric cars will be sold in the last quarter of this year than the total number of all cars sold in the US. Colin McKerracher, head of transport at BNEF, joined Akshat Rathi in September to unpack these trends, and what they mean for global oil demand.

Listen to this episode, and subscribe on Apple, Spotify or YouTube to get new episodes of Zero every Thursday.