According to a new report, published by KBV research, The Global Green Bonds Market size is expected to reach $1086.47 billion by 2031, rising at a market growth of 9.6% CAGR during the forecast period.
The expansion of Islamic finance has led to the rise of Green Sukuk, a financial instrument that integrates Sharia-compliant investments with environmental sustainability. Unlike traditional bonds, Sukuk follows Islamic finance principles, prohibiting interest-based transactions and instead utilizing asset-backed structures. Green Sukuk ensures that proceeds are allocated exclusively to climate-friendly projects, such as renewable energy, green infrastructure, and sustainable urban development.
The Corporates segment is experiencing a CAGR of 8.8 % during the forecast period. Large corporations, particularly in renewable energy, technology, utilities, and automotive (EV manufacturers) sectors, have been at the forefront of green bond issuance to finance their sustainability initiatives. Increasing regulatory pressures, investor demand for ESG-compliant assets, and corporate commitments toward net-zero emissions have driven significant growth in this segment.
The Insurance & Pension Funds segment led the maximum revenue in the Global Green Bonds Market by Investor Type in 2023, thereby, achieving a market value of $319.1 billion by 2031. Insurance companies and pension funds are drawn to green bonds due to their stable, long-term investment horizon, making them well-suited for funding renewable energy, infrastructure, and climate adaptation projects. These investors seek low-risk, fixed-income assets that provide consistent returns while supporting sustainability goals.
The Energy segment is growing at a CAGR of 8 % during the forecast period. Investments in this sector have been substantially stimulated by the increasing emphasis on renewable energy initiatives, which encompass solar, wind, hydropower, and bioenergy. In accordance with global climate objectives and net-zero commitments, governments and private entities have actively issued green bonds to finance the transition from fossil fuels to healthier energy sources.
Full Report: https://www.kbvresearch.com/green-bonds-market/
The Europe region dominated the Global Green Bonds Market by Region in 2023, thereby, achieving a market value of $433.8 billion by 2031. The Asia Pacific region is anticipated to grow at a CAGR of 10.1% during (2024 - 2031). Additionally, The LAMEA region would witness a CAGR of 11.3% during (2024 - 2031).
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