Despite global political and economic volatility, sustainable finance in Asia Pacific has held steady over the years – a trend that global financial institution ING expects to continue in 2026.
The region is emerging as an important contributor to the world’s sustainable finance flows amid increasingly divergent trends in other markets, the Netherlands-headquartered banking group said in its Sustainable Finance Pulse report published today.
In 2025, Asia Pacific recorded strong growth in green bonds and green loans year-on-year, while sustainability-linked loans and transition bonds experienced a small dip.
This trend was largely driven by financial institutions and corporations, while activity from governments, supranational firms, as well as sovereign funds and agencies declined modestly, ING said.
“In 2026, we expect to see more growth from Asia Pacific and potentially a pick-up in transition issuance as policy frameworks continue to develop across the region,” said Martijn Hoogerwerf, head of ING’s sustainable solutions group in Asia Pacific.
The region could potentially see a rebound in transition bond debt this year, the report added.
The bank saw record high sustainable finance volumes in Asia Pacific in 2025, driven by strong deal activity, ING’s report showed. This was driven by strong performance in the first three quarters of the year and leading roles in structuring deals as the sustainable finance coordinator on the majority of its transactions.
ING’s clients in the region are “prioritising practical, bankable green and transition financing solutions, highlighting the growing importance of structuring expertise in delivering credible decarbonisation pathways,” said Anand Sachdev, country manager for ING Singapore and head of South & Southeast Asia.
“The resilience of Asia Pacific’s sustainable finance market is increasingly underpinned by real-economy demand in areas such as energy, infrastructure and digital capacity,” Sachdev added.
Globally, sustainable issuances totalled US$1.557 trillion in 2025, about 6.7 per cent lower than the US$1.669 trillion raised in 2024.
“For 2026, we expect a rise once more, with issuance landing around US$1.621 trillion,” ING said.
Although the region of Europe, the Middle East and Africa (EMEA) is likely to remain the largest source of sustainable finance in 2026, growth will be driven by governments and financial institutes, while corporate issuances are seeing a notable dip, ING said.
This is partly due to the accessibility of conventional debt issuances, which are not linked to environmental, social and governance factors.
“Additionally, EMEA is already a well-established market for corporates with ESG frameworks, but the momentum has been softening,” the report added, describing sustainability-linked debt as a weak spot.
Conversely, sustainable issuances in Central and Eastern Europe are booming, ING said, recording 40 per cent growth year-on-year in 2025 led by sovereigns and state-owned companies.
Despite the shifts in momentum across regions and product choices, ING said that it still sees ample reasons for future growth in the sustainable finance sector. “We have already seen a relatively strong start to the year with US$257 billion coming to the market in the first two months,” it said, although March has witnessed a slowdown due to market volatility induced by the conflict in the Middle East.
