ABN AMRO revised its forecast for European ESG bond issuance in 2025 downward to EUR 247 billion from an earlier projection of EUR 266 billion, the Dutch bank said in its ESG issuance outlook published on 25 September 2025. The downward revision was driven by two principal factors: a surge in negative ESG-related news flow that has weighed on investor appetite for labelled instruments, and a notably weaker-than-expected performance from ESG-labelled senior non-preferred bonds in the first half of the year, which fell significantly short of what the bank had anticipated at the start of 2025. Together, those dynamics have pushed the market's full-year trajectory below the level originally projected.
Actual European ESG bond issuance in the first half of 2025 reached EUR 147 billion, establishing the baseline from which ABN AMRO derived its revised full-year estimate. Achieving EUR 247 billion by year-end would require approximately EUR 100 billion of supply in the second half — a pace that is historically consistent with patterns of second-half issuance acceleration, but that depends on conditions in the ESG bond market stabilising and improving relative to the more difficult environment seen earlier in the year.
GREEN BONDS DOMINATE THE MARKET
Green bonds retained their commanding share of the ESG issuance mix in the first half of 2025, accounting for 83% of total ESG-labelled supply. Social bonds represented 7% of issuance, sustainability bonds 3%, and sustainability-linked bonds 7%. The preference for the green label held consistently across all major issuer categories — financial institutions, sovereign and supranational issuers, and corporate borrowers alike — reinforcing the view that the green bond format remains the dominant standard for labelled sustainable finance in Europe despite the competitive presence of other label structures.
By issuer type, corporates led with 41% of first-half 2025 ESG issuance, followed by financial institutions at 29% and sovereigns and EU institutions also at 29%. The corporate share reflects the range of sectors now accessing the green and sustainability bond market, from energy transition and real estate to infrastructure and manufacturing. Financial institution volumes were constrained in part by the underperformance of ESG-labelled senior non-preferred bonds, a product category that had been expected to contribute more meaningfully to the aggregate supply picture but which was affected by the broader negative sentiment surrounding the ESG label.
ABN AMRO BROADENS ITS OWN ESG FRAMEWORK
ABN AMRO's outlook also referenced its own ESG issuance programme. The bank first entered the green bond market in 2015 and, in 2025, issued bonds in the European Green Bond format established under the EU's official standard. Those EuGB-format bonds are subject to stricter use-of-proceeds requirements, transparency obligations, and post-issuance reporting standards than conventional green bonds. ABN AMRO's programme framework received approval under the European Commission's opt-in process in April 2025, with detailed allocation reporting under the new standard to be published in subsequent annual periods.
The revised forecast and the analysis accompanying it illustrate a market that continues to grow in absolute terms but is proving increasingly sensitive to shifts in the broader ESG narrative. The surge in negative media coverage around greenwashing allegations, corporate ESG policy reversals, and regulatory uncertainty in some jurisdictions has introduced headwinds that ABN AMRO's analysts acknowledge were not fully anticipated when the original forecast was set. How the market performs in the second half of 2025 will provide an important signal about whether structural demand for labelled ESG finance is robust enough to absorb those reputational and political cross-currents and return issuance to the trajectory originally expected.