Investors have increased their investments in assets linked to the climate transition this year, despite regulatory and political setbacks in the United States and Europe, spurred by the expansion of artificial intelligence, which has increased demand for energy infrastructure.
Global issuance of green bonds and loans has so far reached a record of US$947 billion (5.2 trillion reais) in 2025, according to data compiled by Bloomberg Intelligence. The move comes at a time when stock indicators for renewable energy companies are on track to post their first annual gains since 2020, easily outperforming the S&P 500, while shares of technology companies specializing in power grids continue to rise.
The data draws attention to a year in which U.S. President Donald Trump supported fossil fuels and dismantled subsidies and legislation targeting clean energy. Europe has also repealed some of its toughest environmental rules due to concerns about economic growth and competitiveness.
Still, clearer public policy signals and the expectation of a nearly 4% increase in global electricity demand, driven by AI, refrigeration and electrification, have supported investor optimism.
“Green investments are increasingly seen as core infrastructure and industrial investments, rather than just niche ESG bets,” said Melissa Cheok, associate director of ESG investment research at Sustainable Fitch. “Capital tends to flow into areas with clear revenue visibility, regulatory support and structural demand, such as grid modernization and renewables linked to electrification.”
Asia-Pacific companies and government-linked issuers raised US$261 billion (R$1.4 trillion) in green debt, up about 20% from the previous year, with China and India supporting the expansion of renewable sources, according to Bloomberg Intelligence. China has issued a record $138 billion (765 billion reais) of green bonds, led by its biggest banks, and launched its first sovereign issuance in London this year.
So-called greenium – a lower financing cost for green bonds – is more evident in the territory. Some issuers received discounts of more than 14 basis points when using the green badge in November, according to BloombergNEF. These roles typically fund the transition to renewable energy or low-carbon transport.
BNP Paribas and Crédit Agricole are leading the coordination of green bond issuance this year, according to Bloomberg data. The volume of green papers in circulation has grown at a compound annual rate of 30% over the past five years and now represents around 4.3% of the global total, according to researchers at the LSE Group.
Lower U.S. interest rates and the need for refinancing could boost global green bond sales by up to US$1.6 trillion (8.8 trillion reais) next year, said Crystal Geng, head of ESG research for Asia at BNP Paribas Asset Management.
Stocks linked to the green economy have dominated markets in 2025. The clean energy indexes of the S&P Dow Jones and WilderShares indices are up 45% and 60%, respectively, although both remain below their 2021 highs.
In the United States, stocks of solar energy and battery storage companies, such as SolarEdge Technologies, are among the best performing. Wind turbine makers led gains in China and Germany. India has established itself as a hub for IPOs in the renewable energy sector, with 11 IPOs raising more than US$1 billion (5.5 billion reais) and six other companies seeking to raise more than US$3 billion (16.6 billion reais). Last year, 14 companies in the sector raised US$2.4 billion (13.3 billion reais) in IPOs.
However, not all markets have benefited. U.S. green debt issuance fell 7% to US$163 billion (Reais 903.6 billion), while bond sales by supranational organizations fell by a similar magnitude. In Germany, funding remained stable at around US$79 billion (R$437.9 billion).
As India saw a record $7 billion in green lending, strong interest from foreign banks has intensified competition, reducing financing margins by 5% to 10% on renewable energy and other projects, according to Jeanne Soh, head of structured finance for Asia at Sumitomo Mitsui Banking Corp.
Debt issuance linked to the Sustainable Development Goals fell by about 50% this year, to US$165 billion (914.7 billion reais), due to concerns about greenwashing, according to Bloomberg Intelligence data. Transition bonds, aimed at hard-to-decarbonize sectors, fell by more than half, to US$10.9 billion (60.4 billion reais).
These trends are expected to reverse over the next two years, said Xuan Sheng Ou Yong, portfolio manager for sustainable investments at Robeco in Singapore. Changes to fund rules in Europe will allow managers to define what constitutes a sustainable investment, paving the way for emissions-reducing applications in more polluting sectors.
In total, the global volume of sustainable debt totaled around $1.6 trillion this year, a decline of more than 8% from 2024, according to Bloomberg Intelligence. Furthermore, more than US$500 billion (2.7 trillion reais) of social bonds were sold in the United States, linked to the Government National Mortgage Association, Ginnie Mae, which guarantees the principal and interest of mortgage-backed securities.
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