As green bond and loan activity cools elsewhere, the Asia Pacific region is emerging as a rare engine of growth in the world’s sustainable finance market, according to a new report from ING.

Key takeaways

• Asia Pacific bucked a global decline in sustainable finance in 2025, posting strong growth in green bonds and loans driven by financial institutions and corporations.
• ING forecasts a rebound in global sustainable issuances to US$1.621 trillion in 2026, with Asia Pacific expected to lead momentum through transition finance.
• While EMEA remains the largest sustainable finance market, corporate appetite there is softening, making Asia Pacific’s real-economy demand increasingly decisive for global growth.

Despite mounting geopolitical and economic turbulence rattling global markets, the Asia Pacific is holding its ground and in some areas, pulling ahead in sustainable finance. That is the central finding of Dutch banking group ING’s latest Sustainable Finance Pulse report, which paints an increasingly divergent picture between a softening West and a resilient, growing East.

Globally, sustainable issuances totalled US$1.557 trillion in 2025, a decline of roughly 6.7 per cent from the US$1.669 trillion raised the previous year. Yet within that subdued global picture, Asia Pacific stands out. The region recorded strong year-on-year growth in green bonds and green loans in 2025, even as sustainability-linked loans and transition bonds experienced a modest pullback.

The drivers of that growth are notable. Financial institutions and corporations led the expansion, while governments, supranational firms, and sovereign funds and agencies saw a slight decline in activity. ING also reported record-high sustainable finance volumes in the region last year, driven by robust deal activity across the first three quarters and its leading role as sustainable finance coordinator on the majority of its transactions.

A Pivot Point for Transition Finance

Looking ahead, ING is cautiously optimistic. “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 bank specifically flagged the possibility of a rebound in transition bond debt, instruments designed to help carbon-intensive industries shift toward cleaner operations, as regulatory architecture matures across regional markets.

The demand underpinning this growth, ING argues, is structural rather than speculative. “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,” said Anand Sachdev, country manager for ING Singapore and head of South and Southeast Asia.

Sachdev also pointed to a shift in client priorities. Companies in the region are increasingly focused on “practical, bankable green and transition financing solutions,” underscoring the growing importance of structuring expertise in delivering credible decarbonisation pathways.

Contrast with EMEA

The contrast with Europe, the Middle East and Africa is striking. While EMEA is expected to remain the largest source of sustainable finance globally in 2026, its growth will be led by governments and financial institutions, even as corporate issuances see a notable decline. ING attributes this partly to the relative ease of accessing conventional, non-ESG-linked debt, and describes sustainability-linked instruments in the region as a weak spot.

Bucking that trend within EMEA, however, is Central and Eastern Europe. Sustainable issuances there surged 40 per cent year-on-year in 2025, driven by sovereigns and state-owned enterprises.

A Cautious Global Rebound Expected

Despite the global dip in 2025, ING sees reasons for renewed confidence. The bank is forecasting a recovery to around US$1.621 trillion in sustainable issuances for 2026, pointing to a relatively strong start to the year with US$257 billion coming to market in January and February alone. March, however, brought a slowdown as market volatility linked to conflict in the Middle East weighed on sentiment.

For the Asia Pacific, the trajectory appears more insulated. With policy frameworks catching up to market appetite and corporations seeking credible paths to decarbonisation, the region looks set to play an increasingly central role in shaping how the world finances its climate transition.

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