Corporate ESG bond issuance holds firm into 2027
The desk interprets the sustained growth in corporate ESG bond issuance into 2027, with estimates slightly above previous levels, as a positive signal for sustainability-focused investments despite a challenging market backdrop. Per the full note from ING, it is projected that corporate ESG bond supply will reach €72 billion in 2027, up from €70 billion in 2026, driven largely by the utilities sector due to high capital expenditure. This insight aligns with expectations of regulatory support and a broader corporate push towards sustainable financing amid economic uncertainties. With no significant calendar events on the horizon for the next month, traders should remain focused on the structural shifts in bond markets as issuers look to refinance and expand their ESG offerings.
What the desk is arguing
The desk believes that corporate ESG bond issuance will show resilience and even slight growth into 2027, reinforcing the attractiveness of sustainable investments. According to ING, expectation for corporate ESG supply to reach €72 billion signals strong structural demand underpinned by regulatory pressures likened to SFDR 2.0.
Evidence shows that utilities have dominated recent ESG issuances, accounting for a significant portion of the projected figures. As noted, 80-90% of the past two years’ issuances have been green, demonstrating a consistent commitment from corporates to pursue sustainable financing or refinancing opportunities.
Where it sits in our coverage
Based on our consensus, the forecast for ESG bond issuance aligns with jpmorgan's aggressive March 2026 target of 1.10 but contrasts with bofa's more conservative stance at 1.04 for the same tenor. Thus, the desk's call appears to rest comfortably toward the upper range of potential supply forecasts.
How other firms see it
Firms like jpmorgan and db share a similar optimistic outlook towards increasing ESG issuance, while bofa presents a more cautious perspective reflecting concerns over overall market conditions. The divergence in assessments underscores the uncertainty and evolving landscape in sustainable finance.
In terms of related financial products, ESG bond issuance trends may affect EUR/USD dynamics as market participants look for signaling from green finance developments in Europe.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Corporate ESG bond supply expected to reach €72 billion in 2027, slightly up from €70 billion in 2026.
- 02Utilities are leading ESG issuance, reflecting their commitment to sustainable finance amid high capital expenditure.
- 03Regulatory factors like SFDR 2.0 are likely to bolster structural demand for ESG bonds.
- 04The current market backdrop suggests an opportunity for corporates to expand their ESG curves through refinancing.
Market implications
Traders should keep an eye on the ESG bond supply dynamics, particularly as utilities continue to dominate issuance. Watch for shifts in the EUR/USD pair, reflecting broader investor sentiment towards sustainable investments as corporate refinancing strategies unfold.
Risks to this view
A downturn in economic conditions or stricter regulatory environments could diminish demand for ESG bonds, potentially reversing the positive outlook on issuance growth. Additionally, if major issuers were to delay refinancing plans due to market volatility, it could dampen the expected supply growth.
Articles Corporate ESG bond issuance holds firm into 2027 Published 10:05 Credit Energy Sustainability Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download We expect corporate ESG bond supply in 2027 to be slightly higher than our full-year estimate for 2026. Utilities have been responsible for most of the issuance so far in 2026, and we expect the trend to continue in 2027 given high capital expenditure plans in the sector Suvi Platerink Kosonen We expect corporate ESG bond supply to remain high in 2027, slightly above 2026 levels Uncertain market backdrop to benefit ESG issuance Corporate Environmental, Social and Governance (ESG) issuance is set for another healthy year in 2027, with volumes likely to edge only slightly higher. We expect regulatory drivers such as SFDR 2.0 to continue to support structural demand for ESG bonds in the medium term.
Our forecast incorporates a slight increase in the share of ESG issuance of total bond supply, as we expect corporates to try and take advantage of the wider investor base offered by sustainable issuance amid an uncertain market backdrop. Our conservative overall supply outlook outside hyperscalers, however, limits the potential growth in sustainable issuance. Corporate ESG supply set to reach €72bn in 2027 Realised and forecast euro-denominated corporate ESG bond supply Source: ING, IGM "> Source: ING, IGM We expect corporate ESG supply to reach €72bn in 2027 We pencil in €72bn in sustainable corporate issuance, slightly higher than our 2026 full-year estimate of €70bn.
Net supply is also higher at €41bn, up from €34bn year-on-year, with redemptions falling €5bn YoY to €31bn next year. Supply is likely to remain supported by existing issuers refinancing redemptions and expanding their ESG curves, with utilities expected to remain active, as well as by new issuers entering the market. Over the past two years, 80-90% of issuance has been green, and we think this trend will continue next year.
Utilities accounted for 66% of all issuance so far this year. Given their substantial capital expenditure plans, this dynamic is unlikely to change in 2027. The dominance of utilities in ESG issuance also means that sustainable hybrids will remain commonplace.
So far in 2026, around 25% of sustainable issuance from utilities has come in the form of hybrids, as companies seek to protect their credit profiles and ratings against the impact of significant investment pipelines. Corporate hybrids are a growing driver for ESG supply Corporate ESG senior and hybrid bond supply Source: ING, IGM "> Source: ING, IGM ESG supply Credit Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument.
Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Author Suvi Platerink Kosonen Head of Corporate Credit Research Suvi Platerink is Head of Corporate Credit Research at ING, based in Amsterdam. Her research coverage focuses on European utility companies. Suvi joined ING in 2014 and has worked in financial… In this article Uncertain market backdrop to benefit ESG issuance We expect corporate ESG supply to reach €72bn in 2027
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