Sustainable bond issuance in Canada fell by close to a third last year

The issuance of green, social, sustainability and sustainability-linked bonds fell by 30.2% in Canada last year, amid challenging economic conditions and a degree of ESG pullback, a new report by the Institute for Sustainable Finance (ISF) has found.

The issuance of so called GSS+ bonds fell to US$17.47 billion in 2025, down close to a third from their 2024 levels. Canada’s share of global GSS+ issuance also fell during the year, from 2.4% to 1.7%.

‘Difficult times’

“These are difficult times for bond markets in general with trade instability and turmoil in the treasury markets,” commented ISF director of research Yrjö Koskinen. “Plus we’re seeing a few spillovers in Canada of anti-ESG politics in the US.

“But even so issuance in Canada is lagging. We need to figure out why new private issuers aren’t entering the market and work to address those barriers.”

According to the ISF’s report, The Canadian Sustainable Bond Market Report: Third Edition, some 21 unique issuers completed sustainable bond deals in Canada last year, with just one of these a debut entrant.

Green bonds

Green bonds account for around 85% of most Canadian sustainable bond issuance, with sustainability bonds representing almost all the remainder. Social bonds have ‘nearly vanished’, according to the ISF.

Other findings from the study include that clean energy, clean transportation and green buildings together accounted for almost 80% of disclosed allocations, while climate adaptation projects received just 1% of allocations.

Canada has also yet to issue its first clearly labelled ‘transition bond’, a vehicle that has been used in other jurisdictions to finance emissions reductions in heavy industrial sectors.

“The sustainable bond market, measured by issuance amount, is still driven by repeat public-sector issuers,” added Yingzhi Tang, ISF senior research associate. “There’s a real need to broaden the issuer base and encourage more corporates into the market.

“Green bonds also remain dominant. Once Canada’s taxonomy is in place, we could see the emergence of a transition bond market, opening up new opportunities to finance credible transition activities.” Read more here.