Murray Ackman: How a desire for change is driving interest in green bonds 

New data shows impact investing has grown significantly in the past five years. Regnan senior ESG and impact analyst MURRAY ACKMAN explains

• Impact investing surges eightfold since 2020
• Bond market a major growth segment with $145 billion invested
• Find out about Regnan Credit Impact Trust

IMPACT investing is still rapidly growing in popularity as climate change continues to dominate headlines and governments around the world ramp up spending on clean energy and affordable housing.

Impact investing aims to generate positive social or environmental returns as well as a financial return.

The 2025 Benchmarking Impact Report, just released by Impact Investing Australia and the University of New South Wales Centre for Social Impact, reveals that $157 billion is now invested across 197 publicly available impact products – an eightfold increase in value since 2020.

This is nearly 60 per cent higher than the $100 billion estimated in the 2020 report.

Impact Investing Australia started monitoring the development of impact investing back in 2016.

According to the latest report, 84 per cent of impact investors said their investments met or exceeded social and environmental outcomes and 80 per cent said their investments met or exceeded financial expectations.

While overall there has been an eightfold increase in the value of impact investment products over the last five years, the individual segment that has witnessed the highest growth is the investment bond market – increasing by 8.5 times to $145 billion.

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Green bonds first emerged in 2008 via a World Bank launch of this new product, which focuses on environmental projects such as renewable energy and energy efficiency programs.

“This developed a new category of sustainable fixed income where the capital raised is earmarked for specific environmental and social projects,” says Ackman.

The other two main categories of proceeds bonds are social bonds, which focus on projects such as access to essential services and housing, and sustainability bonds, which are a mix of green and social.

“Globally, we see more green bonds than the other categories. This is in part because more entities are able to undertake projects related to the environment: every entity has their own carbon footprint that they can mitigate,” says Ackman.

“Many companies are able to install, generate or access renewable energy and reduce their own emissions through energy efficiency projects.

“However, not all entities are able to have capital intensive projects that might benefit the underserved in society.”

Impact bonds issues continues to grow

According to Ackman, 2024 witnessed the highest ever issuance globally, and Australia is on track for its third consecutive year of the highest amount of issuance.

“In 2020, there were around $8.7 billion in these use-of-proceeds bonds launched in Australia,” explains Ackman. 

“By 2023, there were $21.5 billion new use-of-proceeds bonds launched. There were $50 billion in use-of-proceeds bonds outstanding (bonds continue until the maturity date), which made up 3.5 per cent of the relevant index with 40 issuers.”

As of mid-2025, almost $25 billion proceeds bonds had been issued, says Ackman, with the full year on track for the most ever – $39.5 billion proceeds bonds were issued in 2024.

“Now, around 9 per cent of the relevant index are use of proceeds bonds with 56 issuers covering 14 sectors,” says Ackman.

“This demonstrates the market is maturing with increased diversification of issuers and sectors.”

To date, the Australian Government has only issued green bonds, while state and territory governments generally issue more sustainability bonds (64 per cent), according to the Benchmarking Impact report.

Corporate issuers also appear to favour green bonds, which account for 69 per cent of their allocation.

Around 62 per cent of green, social and sustainability bonds are issued within Australia, while the remaining 38 per cent are issued offshore.