Despite regulatory setbacks, winners of Global Finance’s 2026 awards continue to expand green and blue financing.

The sustainable finance market lost some ground in 2025, and many analysts predict only modest improvement in 2026.

According to the Climate Bonds Initiative, the world’s green, social, sustainable, and sustainability-linked debt totaled $6.5 trillion as of the third quarter of last year. Nearly two-thirds (64%) of that volume consisted of green-labeled debt.

It’s an exceedingly large number, but sustainability-related issuances dipped in 2025. By midyear, Reuters reported that the dollar amount of green bonds sold by governments, banks, and corporations had decreased by almost a third from their 2024 tally. Beyond the green label, all sustainability issuances decreased slightly. Year-to-date estimates by Bloomberg as of early November indicated that worldwide sustainable debt issuances totaled $918 billion, compared to $922 billion in 2024.

Rollbacks of climate change policies in the US and Europe didn’t help the market.

Late last year, the European Commission proposed sweeping revisions to existing environmental legislation. Amendments to its Corporate Sustainability Reporting Directive ease corporate reporting requirements for climate transition plans. The commission is also proposing to roll back environmental laws that require industrial emissions reporting. The aim of the new legislation is to make it easier for businesses to comply with EU emissions and waste-management laws.

Environmental regulations in the US took an even bigger hit. The Trump administration initiated sweeping rollbacks of the nation’s environmental laws. These include actions to reverse vehicular greenhouse-gas standards, along with greenhouse-gas emissions standards for coal plants. The administration has also weakened power-plant emissions rules. Finally, it withdrew the US from the Paris Agreement.

The potential impact of these rollbacks on the sustainability market is clear. Banks and other organizations issue bonds in part to help businesses and individuals meet sustainability mandates. If governments weaken those mandates, they remove some of the motivation for investing in sustainability-related bonds and other instruments.

But not all of it.

“As the impact of storms, wildfires, and droughts on financial portfolios intensifies worldwide, financial institutions face mounting pressure from customers, regulators, and shareholders to improve their climate risk management efforts,” says Peter Plochan, EMEA principal risk management advisor at SAS.

Crédit Agricole expects 2026 to see a small increase in sustainability-related debt facilities: up to €870 billion ($1.19 trillion). Much of this increase they attribute to sustainability efforts in Asia, notably China. Chinese banks now fund a broad array of sustainability-related projects, including carbon transition, green infrastructure construction, sustainable tech manufacturing, and the construction of eco-friendly server farms.

Blue bond issuance may increase. Following the UN Ocean Conference last June, BNP Paribas notes, blue bonds have gained renewed momentum. Proceeds finance everything from clean water infrastructure to marine-plastics mitigation, from biodiversity protection to coastal resilience.

Recognizing the importance of clean water, Global Finance this year offers its first sustainability award for Best Blue Bond, with BTG Pactual winning the global award for financing a project to improve freshwater availability and water sanitation in Brazil.

The mixed picture for ESG market trends is likely to persist in 2026.

The ESG financing label will lose relevance, Plochan predicts, as banks and other lenders focus on specific issues: environmental, social, or governance. “The priority will be on environmental,” he says, “particularly the impact of climate risk.”

However, despite rollbacks in government sustainability mandates, financial services regulators will continue to strengthen their own risk regulations, he adds, given the financial risks posed by intensifying climate events.

“The scope is increasing,” Plochan says. “All environmental risks must be covered, not just the climate ones. And this will affect not only banks, but insurers and, increasingly, asset managers. I expect to see big regulatory shifts, with effects felt particularly in the Asia-Pacific region.”

Whether the combination of these efforts will be enough to heal a fast-warming world is up for debate.

According to the UN Sustainable Development Goals Report 2025, “the world remains far off track from achieving the 2030 agenda for fighting climate change and reducing social inequality.” Out of 139 measurable ESG targets the report examined, “adequate progress” has been made on only 35% by nations worldwide.

This is despite the Copernicus Climate Change Service reporting a global annual average temperature for 2025 that was approximately 1.44 °C above pre-industrial levels. Last year alone, deadly European heat waves, California wildfires, mass floodings in South Africa, and a Category 5 hurricane in the Caribbean could all be traced, at least in part, to climate change.

Methodology

Global and regional awards require submissions detailing hard metrics of sustainability activity, such as year-over-year growth in sustainable finance transactions or sustainable financial instruments as a percentage of total portfolio. Softer metrics also required include goal alignment with leading sustainability norms and innovative product development.

Entries are not required for country awards, which are judged by the editorial team’s independent research. Evaluation criteria include governance policies and goals, achievements in environmental and social sustainability financing, industry leadership, and third-party assessments. This awards program covers activities from January 2025 to December 2025. There was no fee to enter.

Meet the winners