
Claire Dorrian

Shrey Kohli

Alan Meng
The London Stock Exchange’s Sustainable Bond Market celebrates its 10th anniversary, marking a decade of innovation and evolution that continues to this day.
The growth of the global sustainable bond market has been a capital markets success story, mobilising capital flows towards projects that address environmental challenges, reduce social inequality, and advance sustainable development goals. Since the European Investment Bank issued the first green bond in 2007, more than $5.5 trillion has been raised by companies, financial institutions, supranationals and governments from debt capital markets, and with measurable environmental or social outcomes tied to these investments.
LSEG has played a significant role in this story. In 2015, the London Stock Exchange became the first major global exchange to launch a dedicated green bond segment, with a number of green bonds already listed on the London Stock Exchange’s Main Market. This subsequently evolved into the London Stock Exchange’s Sustainable Bond Market (SBM), providing a transparent, high-profile marketplace bringing together investors and issuers.
In the decade since its launch, over 170 unique issuers have placed 720 bonds, raising almost $422 billion (see Figure 1). The proceeds from these bonds have supported a wide range of environmental and social projects, fostering the growth of the green economy and sustainable development around the world (see Figure 2). Project categories focused on energy efficiency, natural resources and sustainable land use together account for around a quarter of the funds raised, with renewables, green buildings and clean transportation also well represented.
Figure 1: Cumulative issuance on London Stock Exchange's Sustainable Bond Market
Figure 2: Use-of-proceeds of all bonds on SBM
From a segment to a market
In August 2015, International Finance Corporation became the first issuer to utilise the dedicated green bond segment, listing a INR3.15 billion bond to finance renewable energy projects in India.
The segment required issuers of green bonds to meet criteria aligned with the International Capital Market Association’s Green Bond Principles and use an independent external reviewer – providing investors with assurance that listed bonds met high market standards.
Building upon its success, in 2019, the London Stock Exchange expanded the green bond segment to launch the dedicated SBM, adding sustainability, social and issuer-level segments (for issuers whose core business is aligned with the green economy) to the offering. In 2020, the SBM further expanded its criteria to enable sustainability-linked bonds to be displayed. Then in 2021, the transition bond segment was introduced for issuers raising debt to be directed at identified climate related activities.
Figure 3: Key developments in the London Stock Exchange's Sustainable Bond Market
Adding value for investors and issuers
The SBM offers advantages for issuers and investors alike. For issuers, it provides:
- Access to an international investor base: The London Stock Exchange is a focal point for international capital. The SBM has helped issuers reach new investors and has often seen bond issues heavily oversubscribed. For example, the $500 million green sukuk from Dubai-based property developer Omniyat issued in May 2025 – its first foray into international debt markets attracted an order book of $1.8 billion. The Climate Investment Fund’s novel Capital Markets Mechanism, listed in February 2025, was six times oversubscribed, with an order book over $3 billion.
- Enhanced visibility: As part of the London Stock Exchange’s award-winning sustainability offering, SBM provides bonds with world-leading visibility. Issuers benefit from featuring alongside high-profile international listings from sovereigns, supranational’s, and corporates many of which represent world firsts in terms of currency, geography, or structure. Market Open ceremonies hosted by the London Stock Exchange celebrate bond issues and related announcements, helping to raise the profile of sustainable investment and issuers with instruments displayed on the SBM. In addition, the London Stock Exchange also hosts industry roundtables which gather issuers, advisors and investors to discuss the latest topics and developments related to their industry and the financial markets.
- Issuance flexibility: The SBM offers dedicated classifications for green, social, sustainability, transition and issuer-level classified bonds, and bonds can seek to be admitted either to the London Stock Exchange’s Main Market or its International Securities Market.
Investors, meanwhile, benefit from:
- A diverse opportunity set: The SBM lists the full range of debt asset classes and instrument types, from plain vanilla bonds to Sukuks. It offers investors access to a diverse range of issuers, in terms of geography, sector, issuer type and uses of proceeds.
- Robust standards: Issuers of securities admitted to SBM are required to meet internationally recognised sustainability standards, to submit their bonds to external reviews and commit to annual reporting, helping to enhance investor confidence.
- Pre- and post-trade analytics: LSEG’s Data & Analytics division offers high-value data, analytics, indices and market surveillance across the sustainable finance ecosystem, including fixed income, providing investors with insights and trading support.
Offshore appeal
The SBM has proved particularly appealing for issuers with limited domestic capital markets who are looking to tap into strong demand from sustainable debt investors for paper that helps them diversify their portfolios (see Figure 4).
Figure 4: Onshore vs offshore issuance on the SBM
Developing market sovereign issuers have come to the SBM to place bonds. For example, Mexico’s first bond linked to achieving the Sustainable Development Goals, while the Côte d'Ivoire chose the SBM for its first sovereign issue in more than seven years. Doing so can help them tap lower-cost funding: when Chile became the first Latin American sovereign to issue a green bond on the London Stock Exchange, it priced at 95bp over US Treasuries – the lowest yield ever achieved for the government’s 30-year debt.
An evolving marketplace
The London Stock Exchange has continued to innovate in the development of the SBM. Reflecting the wider sustainable debt market, it evolves to support the diverse types of activities that issuers are seeking to finance and that investors are seeking exposure to.
We are seeing particular issuer and investor interest in:
Adaptation finance: In the face of growing physical impacts from climate change, sovereigns and companies alike are investing in measures to improve their resilience and are using the SBM to help finance these efforts. For example, the proceeds from Fiji’s 2018 green bond on the SBM were almost entirely directed towards adaptation, as were 12% of the proceeds from the UK’s green gilts programme.
Blue bonds: The blue economy is worth an estimated $3-6 trillion/year, and issuers are beginning to look to the labelled bond market as a source of financing to help protect the world’s oceans. At the end of 2024, logistics firm DP World listed a $100 million bond on the SBM, using the proceeds to fund sustainable marine transportation and port infrastructure, as well as ecosystem conservation.
Debt-for-nature swaps: A growing number of developing market sovereigns are restructuring parts of their international debt at more favourable rates to help fund nature conversation. In October 2024, the Republic of El Salvador closed the largest such transaction to date, refinancing $1 billion of debt at a lower coupon, directing the savings in interest payments to conservation efforts. This is an area we are watching closely, and we stand ready to help support this nascent part of the sustainable finance ecosystem.
The labelled bond market has been a story of continuing experimentation and innovation to direct finance towards sustainability objectives, and to provide investors with attractive investment opportunities that deliver measurable impact to meet their investment goals. The SBM has played an important part in this effort, in enabling both innovation and investment flows. We will continue to support the wider market and are excited about its potential for growth over the decade to come.
Analysis for this article was conducted by Alan Meng, Sustainable Investment Research Lead and the London Stock Exchange Research & Analytics team.
For more analysis from LSEG’s sustainable investment experts please visit our Insights here. Alternatively, if you are a Workspace user, find our analysis on the Research and Insights app. For the latest insights and updates on the UK Capital Markets visit the London Stock Exchange’s Capital Markets Content Library
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