The Bundesbank’s ESG Bond Monitor provides an overview of the sustainable bond market. Among other topics, it examines the issuance of sustainability-linked bonds across different jurisdictions and economic sectors, as well as the performance of sustainable bonds compared to their conventional counterparts. 

In this issue

The year 2025 was the weakest for ESG bonds since 2019, as issuance volumes fell significantly short of previous years. This was due to geopolitical uncertainties and a changing political climate, which appear to have reduced the attractiveness of sustainable financial products for investors. Green bonds accounted for nearly 70 % of ESG bond issuances, with the public sector continuing to play a central role. Nevertheless, volumes lagged behind the record years of 2021–2024, and the share of ESG bonds in total outstanding bonds fell slightly below the previous peak of 3 %.

Capital flows into other ESG products were mixed in 2025: while European ESG bond funds saw moderate inflows, North American ESG equity funds suffered significant outflows. The ESG Sentiment Score indicates that the segment is under pressure from rising interest rates and political uncertainties, further reducing its attractiveness for investors.

available in German only