Green Bond Sales Plunge Amid Policy Rollbacks

The issuance of green bonds, key financial instruments intended for climate and environmental projects, has seen a dramatic decline this year, dropping by almost a third. The retreat comes as both the United States and Europe reverse some of their climate change policies, according to Fitch Ratings.

With a near $100 billion—or 32%—reduction in their sales, green bonds are facing their steepest decline in recent memory. Overall, bonds labeled as environmental, social, and governance (ESG) related have also decreased, now accounting for just 10.2% of the total global bond issuance, down from 11.7%.

The rollback of environmental standards under former U.S. President Donald Trump and ongoing negotiations in the EU to relax corporate sustainability reporting are seen as leading contributors. The uncertainty around capital expenditure amid macro challenges and geopolitical instability has added to the market's cautious stance.

(With inputs from agencies.)