Global issuance of labelled sustainable bonds – including green, social, sustainability, sustainability-linked, and transition bonds – rebounded sharply in the first quarter of 2026 compared to the prior quarter, led by strong growth by European issuers and a jump in social bond issuance, but remained below prior year levels, according to a new report released by Moody’s.

With issuance reaching $241 billion in the quarter, Moody’s said that it continues to expect full-year sustainable bond volumes to remain flat with last year’s levels of around $900 billion. Overall, issuance increased by 18% quarter-over-quarter, and fell 17% year-over-year.

By bond type, the report found that green bonds dominated volumes, accounting for approximately 63% of global issuance. Green bond issuance increased 5% over Q4 2025, with particularly strong growth from European issuers, accounting for $100 billion – up 41% – offsetting a sharp 48% decline in Asia Pacific from the prior quarter.

Social bonds experienced their strongest quarter in nearly 2 years, more than doubling last quarter’s volumes to reach $47.6 billion. Issuance of social bonds was also led by Europe, with French agency CADES as the largest issuer of social bonds at $12 billion. Sustainability bond issuance increased slightly from Q4 2025, but fell by 60% from a particularly strong Q1 2025, while sustainability-linked bond issuance remained subdued at around $3 billion.

Transition bond issuance, currently dominated by Japanese issuers, remain small at $4.1 billion for the quarter, but continues to represent the fastest-growing segment, increasing by 32% over the prior year, and 52% over the prior quarter.

By region, strong growth in sustainable bond issuance in Europe of 58% over the prior quarter, to reach $137 billion, offset a 35% drop in Asia Pacific to $45 billion, while North American volumes were down slightly.

By issuer type, the report found that financial institutions and non-financial corporates remained the largest categories, representing 23% and 25% of volumes, respectively. While financial and corporate volumes declined over the prior quarter, volumes were offset by sharp issuance growth by Agencies and Sovereign issuers, which each more than doubled from the prior quarter.

Click here to access the report.