By David Pendered

Aug. 4 – North American investors have pulled back sharply this year from purchasing bonds that fund social and environmental projects, a new report shows.

For instance, the sale of bonds that fund sectors including renewable energy, clean transportation, energy efficiency, climate change adaption and others plunged by a third in the North American market, comparing the first half of 2025 with the first half of 2024.

The actual sales of green bonds were $32 billion in the first half of 2025, compared to $47 billion in the first half of 2024, according to an analysis of data presented in a July 29 report from Moody’s Investor Services, “Sustainable bond issuance full-year forecast falls to $900 billion after soft first half.”

For overall sales of sustainable bonds, Moody’s analysts have reduced their forecast for 2025 by 10 percent, or $100 billion. That takes the forecasted sales to $900 billion from $1 trillion for the year. Sales in the first six months of 2025 are down 23 percent compared to the same period last year.

The drop in purchases by North American investors may have contributed to the decision to scale back the forecast. Europe posted an uptick in sales, as did, in the first quarter but not the second, Latin America and the Caribbean and the Middle East and Africa. Sales in Asia and the Pacific trended with North America. The report did not offer an interpretation of its findings.

The decline in sustainable bonds sold to North American investors touched every sector of environmental and social investment, according to the report by Moody’s, which defined these instruments, known as labeled bonds, as such:

“Use-of-proceeds green bonds, social bonds, sustainability bonds and transition bonds, whose proceeds are typically earmarked to finance specific eligible environmental and/or social projects; and sustainability-linked bonds, whose proceeds can typically be used for general corporate purposes but whose interest rates are tied to the achievement of various sustainability targets.”

Labeled bonds were created in the wake of the 2007 United Nations report that provided scientific data on climate change and its impacts. Investors sought a vehicle to focus their investments on climate change and the finance community responded with green bonds. The tailored finance approach was expanded to target other areas of concern.

The 2007 Nobel Peace Prize was awarded jointly to former Vice President Al Gore and the UN’s Intergovernmental Panel on Climate Change “for their efforts to build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change.”

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