ING: Sustainable Finance to Reach US$1.62tn in 2026

The sustainable finance sector could be approaching a significant turning point, according to ING's latest market analysis. Issue nine of the bank's Sustainable Finance Pulse suggests the market is demonstrating economic resilience despite facing geopolitical uncertainty and global policy constraints that continue to shape investment decisions.

While economic headwinds persist, including trade disruptions stemming from Middle Eastern conflicts, ING's research indicates the sustainable finance market is positioned to resume growth in 2026. This follows a brief contraction in 2025 attributed to market volatility. According to ING, global markets closed 2025 with sustainable issuance totalling US$1.56tn, with projections suggesting this figure could reach US$1.62tn throughout 2026.

Sustainable finance has become increasingly central to global and regional economic frameworks, with ESG metrics serving as key indicators for assessing long-term investment viability. The market's influence extends across multiple sectors, driving infrastructure development for emerging technologies like artificial intelligence and enabling climate-resilient strategies within commercial real estate portfolios.

Regional dynamics shaping growth

According to ING's analysis, the outlook appears positive, though regional variations present distinct challenges for sustainable finance development.

Europe, the Middle East and Africa (EMEA) are expected to maintain their position as the leading region for sustainable issuance in 2026. While EMEA has established itself as a mature market for corporate ESG frameworks, momentum may be moderating partly due to evolving sentiment around sustainability-linked debt instruments.

The deceleration in corporate issuance and sustainability-linked products extends beyond EMEA, affecting multiple regions globally and highlighting systemic challenges within the market.

The US experienced one of the most significant declines in sustainable supply, with regulatory rollbacks and abandoned climate reporting requirements creating considerable uncertainty for the country's financial sector.

Asia-Pacific (APAC) continues its development trajectory following several years of sustained investment in sustainable finance, with 2026 forecasts suggesting further regional expansion. At the close of 2025, APAC's market showed resilience, supported by strong demand for sustainability-linked loans.

Green financing drives decarbonisation

As regions expand their sustainable finance activities and increase issuance volumes, indicators of growth are emerging. This is evidenced by a robust start to 2026, with US$257bn entering the market during the opening two months.

According to ING, numerous corporations maintain their commitment to decarbonisation strategies, with particular emphasis on green financing initiatives supporting low impact development products within real estate and infrastructure sectors.

The research highlights that green finance serves a crucial function in decarbonising and managing climate risk within property markets. Investors are increasingly targeting assets demonstrating strong energy performance while seeking methods to embed sustainability principles into financing structures. Since 2020, green bond issuance has consistently hovered around 40%, a trend continuing into 2026.

"Our greatest impact is partnering with clients to assist them in upgrading their brown assets, using transition finance and deep sector expertise to help make their projects more sustainable," says Sylvia Brandsma, ING's Global Head of Real Estate and Infrastructure.

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Navigating uncertainty while prioritising climate action

While regional investment in sustainable projects continues, political instability and policy changes, including the elimination of climate-related tax incentives, present ongoing challenges for the global sustainable finance market.

Despite these obstacles, numerous organisations continue prioritising sustainability as a core strategic pillar, concentrating on long-term climate investment approaches, competitive positioning and innovation pathways.

The transition towards sustainable finance requires organisations to balance immediate pressures against longer-term environmental objectives, with market participants seeking to identify opportunities within an uncertain landscape.

"The transition path is full of unknowns and can be messy, but it is also full of opportunity. We're helping clients cut through the disorder to manage risk, unlock value and protect it for the long term," says Jacomijn Vels, ING's Global Head of Sustainable Solutions Group.

As the sustainable finance sector navigates geopolitical shifts and regulatory changes, the market's trajectory suggests organisations recognising sustainability as integral to future competitiveness could be better positioned to capitalise on emerging opportunities while managing transition-related risks.