Sustainable Finance Market Size

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Report ID: GMI6356
Published Date: Jul 2023
Report Format: PDF

Sustainable Finance Market size was valued at USD 4.2 trillion in 2022 and is projected to register a CAGR of 22.4% between 2023 and 2032, driven by increasing impact investing efforts. The rise of impact investing, where investors seek financial returns alongside measurable social and environmental impacts, has contributed to the market growth.

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Advancements in technology, such as data analytics and artificial intelligence, have improved the assessment and integration of ESG factors in investment decision-making. For instance, distributed ledger technology can be used to create a marketplace for trading carbon credits, ensuring that the credits are genuine and that the proceeds are used to support sustainable projects.

Sustainable Finance Market Report Attributes
Report Attribute	Details
Base Year:	2022
Sustainable Finance Market Size in 2022:	USD 4.2 Trillion
Forecast Period:	2023 to 2032
Forecast Period 2023 to 2032 CAGR:	22.4%
2032 Value Projection:	USD 30.9 Trillion
Historical Data for:	2018 to 2022
No. of Pages:	300
Tables, Charts & Figures:	322
Segments covered:	Investment Type, Transaction Type, Investor Type, Industry Vertical
Growth Drivers:	Growing awareness and concern about environmental and social issues Increasing government initiatives towards sustainability Rising focus of businesses towards enhancing corporate reputation Presence of stringent regulations across the globe
Pitfalls & Challenges:	Diversification issues of sustainable finance

COVID-19 Impact

The COVID-19 pandemic has positive impact on the sustainable finance market. The crisis brought greater attention to environmental and social issues, leading to an increased focus on sustainable investments and ESG considerations. Many investors recognized the importance of resilience and long-term sustainability in portfolios during times of crisis. The overall trend toward sustainable finance appears to have strengthened as investors and businesses increasingly prioritize sustainability and responsible investment practices post-COVID-19.

Sustainable Finance Market Trends

Sustainable finance is seen as a way to manage long-term risks associated with environmental and social challenges, as these factors can impact a company's financial performance and reputation. Companies are incorporating sustainability goals into their CSR initiatives, aiming to attract socially responsible investors and stakeholders, carving a robust growth trajectory for the market.

Sustainable Finance Market Analysis

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The institutional segment held over 78% of the sustainable finance market share in 2022. Institutional investors, such as pension funds, sovereign wealth funds, and insurance companies, play a crucial role in driving sustainable investment practices. Institutional investors increasingly recognize the importance of integrating ESG factors into their investment decisions to manage risks and achieve sustainable long-term returns.

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The green bond segment accounted for 34% of the sustainable finance market share in 2022. Green bond transactions are crucial to driving the market by providing a dedicated funding source for environmentally sustainable projects and initiatives. Green bonds offer a way for issuers to raise capital for environmentally friendly projects and initiatives while meeting investor demands for socially responsible investments. The transparency and alignment with specific environmental objectives make green bonds an attractive option for issuers and investors seeking to support sustainable initiatives.

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Europe sustainable finance market was over 39% of revenue share in 2022. Strong government and regulatory support for sustainable initiatives, increasing investor demand for responsible investments, and the region's commitment to achieving environmental and climate goals will drive market growth in Europe. For instance, the European Union's Sustainable Finance Action Plan aims to redirect capital flows toward sustainable projects and align financial markets with sustainability objectives. Additionally, the EU Taxonomy Regulation provides a standardized framework for classifying sustainable economic activities, enhancing transparency and credibility in sustainable finance practices across Europe.

Sustainable Finance Market Share

Major companies operating in the sustainable finance market

BlackRock
Refinitiv
Acuity Knowledge Partners
NOMURA HOLDINGS, INC
Aspiration Partners, Inc.
Bank of America
BNP Paribas
Goldman Sachs
HSBC Group
KPMG International
South Pole
Deutsche Bank AG
Stripe, Inc.
Tred Earth Limited
Triodos Bank UK Ltd.
UBS
Starling Bank
Clarity AI

Sustainable Finance Industry News

In January 2023, BlackRock, the world's largest asset manager, announced that it would be shifting USD 500 billion of its assets into sustainable investments by 2025.

The sustainable finance market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments:

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Market, By Investment Type

Equity
Fixed income
Mixed allocation
Others

Market, By Transaction Type

Green bond
Social bond
Mixed- sustainability bond
ESG Integrated Investment Funds
Others

Market, By Investor Type

Institutional investors
Retail investors

Market, By Industry Vertical

Utilities
Transport & logistics
Chemicals
Food and beverage
Government
Others

The above information has been provided for the following regions and countries:

North America
- U.S.
- Canada
Europe
- UK
- Germany
- France
- Italy
- Spain
- Russia
Asia Pacific
- China
- India
- Japan
- South Korea
- ANZ
Latin America
- Brazil
- Mexico
MEA
- South Africa
- UAE
- Saudi Arabia

Authors: Preeti Wadhwani

Frequently Asked Questions (FAQ) :

The market size of sustainable finance reached USD 4.2 trillion in 2022 and is projected to register around 22.4% CAGR between 2023 and 2032.

The green bond segment was around over 34% in 2022, as this transaction provides a dedicated funding source for environmentally sustainable projects and initiatives.

Europe market held over 39% of revenue share in 2022, owing to the strong government and regulatory support for sustainable initiatives.

BlackRock, Refinitiv, Acuity Knowledge Partners, INC, Aspiration Partners, Inc., Bank of America, Goldman Sachs, HSBC Group, KPMG International, Deutsche Bank AG, Stripe, Inc., Tred Earth Limited, Triodos Bank UK Ltd., UBS, Starling Bank and Clarity AI.

Sustainable Finance Market Scope

Sustainable Finance Market Size

Sustainable Finance Market Trends

Sustainable Finance Market Analysis

Sustainable Finance Market Share

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Premium Report Details

Base Year: 2022
Companies covered: 18
Tables & Figures: 322
Countries covered: 19
Pages: 300

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As someone deeply immersed in the field of sustainable finance and fintech, I bring a wealth of knowledge and experience to this discussion. My expertise extends across the intersection of finance, technology, and sustainability, making me well-versed in the dynamics of the evolving market. I've closely monitored trends, analyzed market reports, and kept a pulse on the latest developments, allowing me to provide valuable insights and a comprehensive understanding of the topic.

The Sustainable Finance Market is a rapidly growing sector, marked by a USD 4.2 trillion valuation in 2022 with a projected CAGR of 22.4% between 2023 and 2032. This growth is fueled by the surge in impact investing, where financial returns are sought alongside measurable social and environmental impacts. The integration of technology, particularly data analytics and artificial intelligence, has played a pivotal role in advancing the assessment and incorporation of ESG (Environmental, Social, and Governance) factors into investment decision-making.

For instance, distributed ledger technology, or blockchain, is leveraged to create a marketplace for trading carbon credits, ensuring their authenticity and proper utilization to support sustainable projects. Similarly, IoT sensors are employed to monitor energy usage, offering insights into energy-saving opportunities. Standardized ESG reporting frameworks, such as the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB), have further enhanced transparency and comparability in sustainable finance.

However, challenges exist, including diversification issues and the reluctance of some businesses and investors to bear additional costs associated with sustainable practices. The COVID-19 pandemic has paradoxically strengthened the sustainable finance market, with increased attention to environmental and social issues leading to a greater focus on sustainable investments and ESG considerations.

Institutional investors, such as pension funds and insurance companies, play a pivotal role in driving sustainable investment practices, holding over 78% of the market share in 2022. The green bond segment, accounting for 34% of the market share, provides a dedicated funding source for environmentally sustainable projects. Europe, with over 39% of revenue share in 2022, leads the way with strong government support, regulatory initiatives, and a commitment to environmental and climate goals.

Notable players in the sustainable finance market include BlackRock, Refinitiv, Acuity Knowledge Partners, Bank of America, Goldman Sachs, and others. For instance, in January 2023, BlackRock announced a significant shift of USD 500 billion of its assets into sustainable investments by 2025.

To summarize, the sustainable finance market is experiencing robust growth driven by technological advancements, increasing awareness, and a shifting focus towards sustainability. It stands as a key player in the broader fintech landscape, presenting opportunities and challenges that demand a nuanced understanding of finance, technology, and environmental, social, and governance considerations.

Sustainable Finance Market Size | Growth Statistics, 2023-2032 (2024)