PUBLISHER: The Business Research Company | PRODUCT CODE: 1546607
PUBLISHER: The Business Research Company | PRODUCT CODE: 1546607
Sustainable finance involves integrating environmental, social, and governance (ESG) criteria into financial decision-making, investment strategies, and lending practices. Its goal is to foster economic growth while mitigating environmental impact, addressing societal issues, and promoting effective governance. Sustainable finance aims to align financial systems with sustainable development objectives, ensuring that financial investments contribute to sustainable economic progress and the welfare of society and the environment.
The primary investment categories within sustainable finance include equity, fixed income, mixed allocation, and others. Equity represents a company's net assets owned by shareholders after deducting liabilities. It plays a crucial role in advancing the shift toward sustainable finance and a more sustainable economy. Various financial instruments include green bonds, social bonds, mixed-sustainability bonds, ESG-integrated investment funds, and others. Investor types span institutional investors and retail investors, while industry sectors encompass utilities, transport and logistics, chemicals, food and beverage, government, among others.
The sustainable finance market research report is one of a series of new reports from The Business Research Company that provides sustainable finance market statistics, including sustainable finance industry global market size, regional shares, competitors with a sustainable finance market share, detailed sustainable finance market segments, market trends, and opportunities, and any further data you may need to thrive in the sustainable finance industry. This sustainable finance research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.
The sustainable finance market size has grown exponentially in recent years. It will grow from $5,487.20 billion in 2023 to $6,718.20 billion in 2024 at a compound annual growth rate (CAGR) of 22.4%. Historical period growth was driven by increased investor demand and emphasis on risk management, corporate social responsibility initiatives, regulatory backing, attention to sustainable supply chains, and investments in renewable energy.
The sustainable finance market size is expected to see exponential growth in the next few years. It will grow to $15,313.29 billion in 2028 at a compound annual growth rate (CAGR) of 22.9%. Forecasted growth is expected due to heightened efforts to reduce carbon footprint, increased demand for sustainable investments, growing awareness of sustainability across sectors, rising interest in financial products and services, and expanded availability of green bonds. Key trends in the forecast period include technological advancements, adoption of artificial intelligence, integration of green technologies, financing for climate resilience, and sustainability-linked loans.
The growth of the sustainable finance market is expected to be driven by the increasing adoption of corporate social responsibility (CSR) initiatives. CSR involves businesses aiming to positively impact society, the environment, and stakeholders, beyond profit maximization. This rise in CSR initiatives is motivated by ethical responsibility, enhancing reputation and brand image, fostering employee engagement and retention, managing risks, and meeting consumer expectations. By aligning financial practices with ethical, environmental, and social goals, CSR initiatives not only enhance corporate reputation but also attract investment and foster the development of innovative financial products. This contributes to building a more sustainable and resilient global economy. For example, Takeda Pharmaceutical Company Limited, a Japan-based biopharmaceutical company, recently announced grants totaling $19.5 million to 21 new U.S. non-profit organizations as part of its 2022 corporate social responsibility program. This commitment, which follows an initial $20 million investment in 2021, now totals $39.5 million aimed at promoting equity in under-resourced communities through initiatives in health, education, environment, and access to healthy foods. Thus, the rise of corporate social responsibility initiatives is a significant driver of growth in the sustainable finance market.
Major corporations in the sustainable finance sector prioritize leveraging sustainable finance innovation to enhance their competitive edge. This innovation involves developing and deploying novel financial products, services, and strategies that integrate environmental, social, and governance (ESG) criteria to advance sustainable development goals. For instance, in April 2024, Ernst & Young Global Limited, a UK-based transaction services firm, inaugurated a new Sustainable Finance Innovation Hub in Dublin. This initiative assists global financial institutions in accelerating their compliance with ESG regulations and reporting requirements, offering specialized advisory services and expertise to navigate the evolving landscape of sustainable finance.
In August 2023, Environmental Resources Management (ERM), a UK-based consultancy, acquired NINT to bolster its capabilities in sustainable finance and ESG consultancy, particularly in the Latin American market. NINT, a US-based consultancy specializing in sustainable finance services, was acquired for an undisclosed sum.
Major companies operating in the sustainable finance market are AXA Group, Bank of America Corporation, Citigroup Inc., The Hongkong and Shanghai Banking Corporation, BNP Paribas, Morgan Stanley Dean Witter Discover & Co., Internationale Nederlanden Group, Mitsubishi UFJ Financial Group, UBS Group AG, Goldman Sachs Group Inc., Barclays plc, Sumitomo Mitsui Financial Group Inc., Aviva plc, Credit Suisse Group AG, BlackRock Inc., Standard Chartered plc, Nomura Holdings Inc., Natixis SA, Northern Trust Corporation, Amundi SA, Macquarie Group Limited, Legal & General Group plc, State Street Global Advisors, Robeco
North America was the largest region in the sustainable finance market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the sustainable finance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
The countries covered in the sustainable finance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The sustainable finance market includes revenues earned by entities by providing services such as sustainable loans, environmental, social, and governance (ESG) integration, sustainable investment funds, and advisory services and related social impact bonds (SIBs), green mortgages, and carbon offsets and credits. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Sustainable Finance Global Market Report 2024 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on sustainable finance market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for sustainable finance ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward? The sustainable finance market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The impact of sanctions, supply chain disruptions, and altered demand for goods and services due to the Russian Ukraine war, impacting various macro-economic factors and parameters in the Eastern European region and its subsequent effect on global markets.
The impact of higher inflation in many countries and the resulting spike in interest rates.
The continued but declining impact of COVID-19 on supply chains and consumption patterns.