ESG Finance Market Size (2024 - 2029)

ESG Finance Market Analysis

The ESG Finance Market size is estimated at USD 7.02 trillion in 2024, and is expected to reach USD 11.33 trillion by 2029, growing at a CAGR of 10.04% during the forecast period (2024-2029).

Investment in sustainable firms is rising due to the increasing demand for financial professionals specializing in sustainable finance. Not only does sustainable finance reduce risk exposure and improve returns, but it also reduces costs and mitigates risk. However, market growth is limited by challenging diversification challenges and high operating expenses. Despite this, the market for sustainable finance has a lot of potential for profitability as industries become more conscious of the environment.

The ESG finance market is growing due to an increase in investment in sustainable businesses. Investors increasingly know the need to tackle environmental and social issues and are looking for sustainable investment opportunities.

The market is expected to grow as people become more aware and concerned about the environment and social problems, including climate change, depletion of resources, and social injustice. This increased awareness has led to an increase in the need for sustainable financial solutions as people, companies, and institutions want to make sure their investments are in line with their beliefs and help make the world a better place. Regulatory frameworks and government policies also play an important role in the market's growth.

Sustainable finance comes in many forms. Institutional investors and funds are now embracing a variety of ESG investing strategies. This shift has been driven by changes in demand across the financial system, driven by both a desire for better long-term financial value and a desire to align with values. For instance, one of the most notable developments in ESG finance in the current year is the phenomenal growth of green issuance, compared to significant declines in issuance in the United States and Asia.

ESG Finance Industry Segmentation

The ESG finance market is segmented by investment type, transaction type, investor type, industry vertical, and region. By investment type, the market is segmented into equity, fixed income, mixed allocation, and others. By transaction type, the market is segmented into green bonds, social bonds, mixed sustainability bonds, ESG-integrated investment funds, and others. By investor type, the market is segmented into institutional investors and retail investors. By industry vertical, the market is utilities, transport & logistics, chemicals, food and beverage, government, and others, and by region, the market is segmented into North America, Latin America, Europe, Asia-Pacific, Middle East and Africa. The report offers market size and forecasts for the ESG finance market in value (USD) for all the above segments.