What Fueled The Previous Growth In The ESG Finance Market?
The esg finance market has seen considerable growth due to a variety of factors.
• The ESG finance market has grown significantly in recent years. It will increase from $6347.59 billion in 2024 to $7066.54 billion in 2025, with a CAGR of 11.3%.
This growth is attributed to heightened awareness of climate change, evolving regulations, the growth of green bonds, corporate sustainability initiatives, and shifting consumer preferences.
What Can Be Expected from the ESG Finance Market Size?
The esg finance market is expected to maintain its strong growth trajectory in upcoming years.
• The ESG finance market is projected to experience rapid growth, reaching $10752.82 billion by 2029 with a CAGR of 11.1%.
The growth is attributed to stronger regulatory frameworks, increased focus on climate risk management, corporate sustainability goals, rising institutional investments, and global climate efforts. Trends include enhanced ESG data and analytics, ESG technology advancements, AI integration, and blockchain implementation.
What Are the Critical Driver Fuelling The ESG Finance Market's Growth?
The increasing investment in green bonds is expected to spur growth in the ESG (Environmental, Social, and Governance) finance market. Green bonds raise funds for environmentally sustainable projects, and their rising popularity is driven by climate change awareness and the demand for socially responsible investments. In May 2024, the International Finance Corporation projected green bond issuance to grow at 7.5% annually, reaching $156 billion by 2025, fueling growth in ESG finance.
How Is The ESG Finance Market segmented?
The ESG finance market covered in this report is segmented –
1) By Investment Type: Equity, Fixed Income, Mixed Allocation, Other Investment Types
2) By Investor Type: Institutional Investors, Retail Investors
3) By Transaction Type: Green Bond, Social Bond, Mixed Sustainability Bond, ESG Integrated Investment Funds, Other Transaction Types
4) By Industry Vertical: Utilities, Transport And Logistics, Chemicals, Food And Beverage, Government, Other Industry Verticals
Subsegments:
1) By Equity: Esg-Focused Equity Funds (Green Etfs, Sustainable Equity Funds), Socially Responsible Investing (Sri) Equity Funds, Esg Integration In Corporate Equity Investment, Thematic Esg Equity Funds (Renewable Energy, Clean Technology), Impact Investing Equity Strategies
2) By Fixed Income: Green Bonds (Focused On Environmental Projects), Social Bonds (Focused On Social Impact Initiatives), Sustainable Bonds (Integrating Esg Factors), Esg Bond Funds And Etfs, Green And Social Impact Corporate Debt
3) By Mixed Allocation: Esg Multi-Asset Funds, Esg Diversified Portfolios (Equities, Bonds, And Alternative Assets), Esg Asset Allocation Funds (Combining Equities, Fixed Income, And Real Assets), Balanced Esg Funds, Thematic Esg Funds (Climate Change, Gender Equality)
4) By Other Investment Types: Esg-Focused Private Equity And Venture Capital, Impact Investing Funds, Esg Real Estate Investment Funds (Reits), Esg Commodities And Infrastructure Investments, Esg Alternative Investments (Hedge Funds With Esg Strategies)
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What New Trends Are Influencing The ESG Finance Market?
Companies in the ESG finance market are integrating AI to improve investment decisions and meet the growing demand for transparency in sustainable finance. AI-powered platforms analyze vast amounts of ESG data, providing actionable insights. For example, in March 2022, ESG Data Services Inc. launched ESG Analytics, an AI-powered platform offering insights into environmental, social, and governance practices across countries, companies, and ETFs. This platform supports real-time decision-making by researchers, analysts, and corporations.
Who Are the Key Players In The ESG Finance Market?
Major companies operating in the ESG finance market are:
• JPMorgan Chase & Co.
• HSBC Holdings plc
• Morgan Stanley
• BNP Paribas Asset Management S.A.
• The Goldman Sachs Group Inc.
• UBS Group AG
• Deutsche Bank AG
• Fidelity Investments Inc.
• The Bank of New York Mellon Corporation
• BlackRock Inc.
• State Street Corporation
• The Vanguard Group Inc.
• Franklin Templeton Holdings Ltd.
• Northern Trust Asset Management
• T. Rowe Price Group Inc.
• Amundi Asset Management Inc.
• Invesco Ltd.
• Schroders plc
• Pacific Investment Management Company LLC
• Allianz Global Investors GmbH
• Columbia Threadneedle Investments Inc.
• AXA Investment Managers S.A.
• Wellington Management Company LLP
• Natixis Investment Managers International
• Legal & General Investment Management Limited
What Is The Most Dominant Region In The ESG Finance Market?
Europe was the largest region in the ESG finance market in 2023. North America is expected to be the fastest-growing region in the forecast period. The regions covered in the ESG finance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
