As the London Stock Exchange marked the 10-year anniversary of its Sustainable Bond Market, Kelly Gregory and Baylie Thompson discuss the platform’s evolution, key milestones, and what lies ahead for sustainable debt markets in 2026 and beyond
Environmental Finance: The Sustainable Bond Market (SBM) marked its 10-year anniversary last June. Looking back, what key insights or milestones stood out to you, and how would you characterise the market’s evolution through 2025?
Kelly Gregory: The 10-year anniversary was a major milestone for us. It marked a decade since we first established dedicated green bond segments on the London Stock Exchange (LSE), which later evolved into today’s SBM.
In the decade since its launch, over 190 entities have placed 971 issuances, raising almost $466 billion. That scale reflects the role the LSE plays within the broader sustainable finance ecosystem.
To mark the anniversary, we brought the ecosystem together at our London headquarters, creating a moment for the key figures behind what started as the Green Bond Principles, and issuers, investors and partners to connect, reflect and look ahead.
An accompanying blog continued this conversation, exploring how the market has evolved and how use-of-proceeds capital is shaping real-world outcomes.
The breadth of impact is noteworthy, with financing raised through the SBM having supported energy efficiency, natural resource management, sustainable land use, renewables, green buildings and clean transportation. These categories account for a significant share of the capital raised on the SBM and demonstrate how environmental and social priorities have become embedded in global funding strategies.
One of the most notable aspects of the SBM’s development has been its international reach. Around 39% of the total amount raised has come from offshore issuers as well as 20% from supranational issuers. Since launch, there have been 25 unique currency denominations on the SBM. For those with smaller domestic capital markets, London provides access to a diversified global investor base seeking high-quality sustainable debt. At the same time, issuers benefit from alignment with recognised principles such as the International Capital Market Association (ICMA) guidelines and robust disclosure standards. That combination remains a major draw.
Despite global sustainable bond issuance softening somewhat in 2025, activity on the SBM remained broadly consistent with previous years. We also saw several noteworthy transactions:
In February, the Council of Europe Development Bank (CEB) celebrated a dual milestone: the first sterling-denominated sovereign, supranational, and agency (SSA) social bond listed in London and its first-ever sterling social bond issuance. That marked an expansion beyond its traditional euro issuance and highlighted continued growth in the social segment with investors.
In May, Dubai real estate developer Omniyat raised $500 million through its debut green sukuk. The three-year sukuk, priced at 8.375% semi-annual coupon, was oversubscribed, with order books exceeding $1.8 billion. The transaction marked Omniyat’s first entry into the international debt capital markets.
Then, in October, Korea Housing Finance Corporation issued its inaugural sterling covered bond, raising $300 million. It was the first public sustainability-labelled sterling covered bond by a non-UK issuer on our market.
The SBM also often opens doors for conversations with issuers on how they can create impact outside the traditional labelled market. One such example was in September 2025, when the International Finance Corporation (IFC) completed its first $510 million securitisation transaction as a new model to mobilise private capital into emerging markets.
By repackaging IFC-originated loans, the structure enabled asset owners and asset managers to scale exposure to emerging market assets. Whilst the securitisation isn’t labelled itself, the loan book covers a number of emerging markets countries and industries that are eligible for green and social bonds.
EF: How is issuance activity shaping up so far in 2026, and what are your expectations for activity in the year ahead?
KG: We’ve had a strong start to the year, with over $14.6 billion raised in January alone.
Although the year is still unfolding, we are seeing a steady pipeline, with issuers continuing to favour use of proceeds formats as a clear way to demonstrate climate and social commitments and to sustain investor engagement
We recently welcomed Standard Chartered to celebrate its inaugural green bond with a market open ceremony at the London Stock Exchange. In the SSA space, we’ve seen issuance from the International Fund for Agricultural Development, European Bank for Reconstruction and Development, Asian Infrastructure Investment Bank, IFC and CEB, alongside sovereign transactions from Mexico and Hungary. The diversity of instruments and issuers already has been encouraging.
Although the year is still unfolding, we are seeing a steady pipeline, with issuers continuing to favour use of proceeds formats as a clear way to demonstrate climate and social commitments and to sustain investor engagement. SSA issuance, historically a cornerstone of our market, is expected to remain a key driver of volumes, complemented by a growing cohort of corporate issuers embedding labelled debt into their long-term sustainability strategies.
EF: Globally, a significant volume of sustainable bonds is scheduled to mature this year. Do you expect a similar ‘maturity wave’ on the SBM, and how are issuers approaching refinancing?
KG: We expect the global refinancing trend to be reflected on the SBM. It will be interesting to see if issuers roll over into new labelled issuance and reaffirm sustainability commitments.
For many issuers, refinancing provides an opportunity to reaffirm sustainability commitments, update existing frameworks and, where relevant, refine KPIs. Rising investor expectations around continuity, impact reporting and transparency are also encouraging issuers to view refinancing not as a procedural exercise, but as a chance to strengthen their sustainability narrative and provide clearer disclosure.
An example is CAF – the Development Bank of Latin America and the Caribbean. Following a framework update and a maturing bond on the SBM, CAF issued its first €1.5 billion ($1.7 billion) sustainability bond in September, building on an earlier blue bond that year. Investor appetite was very good, with demand exceeding €14.9 billion.
EF: What feedback do you receive from issuers on the SBM?
KG: Visibility is a major benefit. The SBM provides a platform to showcase their activities, be part of a peer group and attract investors. Market open ceremonies, for example, give issuers a moment to step back and celebrate the transaction – and the progress made.
Baylie Thompson: The additional exposure and enhanced visibility are especially valuable to debut and milestone transaction issuers, helping them to broaden and diversify their investor base. The SBM’s alignment with industry standards, active oversight of issuers’ post-issuance reporting and their commitment to transparent allocation and impact disclosure, and integration into our London Stock Exchange Group Data & Analytics Platforms collectively helps to reinforce the credibility of transactions and strengthen discoverability.
EF: Which structural or thematic trends are gaining the most traction this year?
BT: We continue to see growing traction in the blue economy as investors recognise the link between ocean health, water climate stability and long-term economic resilience.
Increasingly, stakeholders expect use of proceeds to be materially linked to an issuer’s wider sustainability strategy and core operations. That is one reason we are seeing issuance from sectors such as shipping, water infrastructure and other marine-related activities, where the environmental risks and opportunities are inherently material to operations.
A notable example is Tideway, which became the first UK corporate to issue a sterling-denominated blue bond, raising
£250 million ($339.4 million) in eight-year notes dedicated to marine and freshwater improvements. Known as London’s “super sewer”, the Tideway Tunnel had already diverted over seven million cubic metres of sewage from the River Thames prior to issuance.
Another important theme is sustainable sukuk, with issuance reaching nearly $25 billion globally in 2025, accounting for 8.1% of all sukuk issuance in the same period. We expect continued growth and greater issuer diversification: previously dominated by corporates and financial institutions, the segment is now seeing increasing sovereign and supranational participation. For example, in October 2025, the Islamic Development Bank issued a $500 million green sukuk on the SBM. It was five times oversubscribed, with a broad investor base.
KG: January saw the implementation of new Financial Conduct Authority (FCA) Prospectus Rules under the Public Offers and Admissions to Trading regime, alongside updates to our International Securities Market (ISM) rulebook. Under this approach, sukuk instruments guaranteed by sovereigns or central banks are now treated as prospectus-exempt, enabling a faster route to market and more streamlined issuance processes. This further strengthens London’s position as a hub for sukuk activity.
EF: Do you anticipate an uptick in transition bond issuance, particularly as frameworks and taxonomies continue to mature?
BT: Interest in transition finance accelerated over the past year, and we expect momentum to continue into 2026 as policymakers and working groups focus on scaling transition-related capital flows and look at overcoming the challenges around classification, credibility, and how to assess transition pathways.
We believe high-quality benchmark issuances will be crucial in building investor confidence in labelled bonds
The Asia-Pacific region is likely to remain dominant, with Singapore, Hong Kong and India all launching transition-related taxonomies and frameworks, and Japan continuing to play a leading role.
The SBM includes a dedicated transition bond classification to support issuers in carbon-intensive sectors with credible decarbonisation pathways.
The SBM includes a dedicated transition bond classification to support issuers in carbon-intensive sectors with credible decarbonisation pathways. We believe high-quality benchmark issuances will be crucial in building investor confidence in labelled bonds.
With the release of ICMA’s Climate Transition Bond Guidelines and updated Climate Transition Finance Handbook, the market does now have clearer guardrails and more consistent expectations for credible transition financing. We think these developments, alongside the work of the UK Transition Finance Council in developing entity level guidelines, should help to move transition finance from concept to reality.
We are also seeing growing attention on climate adaptation and resilience. A recent example was the Tokyo Metropolitan Government’s €300 million issuance – the first certified under the Climate Bonds Initiative’s climate resilience taxonomy – which was more than seven times oversubscribed. At the most recent COP in Brazil, governments agreed to triple adaptation finance from public sources by 2035, reinforcing this theme.
EF: How do you see regulatory developments shaping sustainable finance in 2026 and beyond?
BT: In Europe, the EU Green Bond Standard is expected to see increased uptake in 2026, although it will likely remain a niche segment due to its rigorous requirements. Since entering into force in 2024, momentum has been encouraging, with early-adopting issuers recording strong subscription levels and positive market reception.
Meanwhile, the EU’s Sustainable Finance Disclosure Regulation 2.0 is expected to influence capital allocation as funds may recalibrate offerings to fit within the new categories. Transition and sustainability-linked bonds have previously struggled to fit into regulatory sustainable investment categories; the introduction of a new transition category in Article 7 funds may provide clearer positioning and drive both investor appetite and additional issuance.
Kelly Gregory is a product manager, and Baylie Thompson is a senior associate, at the London Stock Exchange. They are both members of the Advisory Council to the Sustainable Bond Principles, 2025-26
To learn more about its Sustainable Bond Market, see www.londonstockexchange.com/raise-finance/debt/ourproducts/sustainable-bond-market