Green bond issuance hits record amid ESG regulatory challenges

Global green bond issuance reached a second-quarter record of $218 billion, a 14% year-on-year increase driven largely by corporate borrowers in Europe and Asia. This surge in climate-aligned financing occurs despite growing political and legal challenges regarding environmental, social, and governance (ESG) disclosures.

In the United States, sixteen Republican-led states have accused the “Big Four” accounting firms—Deloitte, PwC, EY, and KPMG—of pushing climate-related disclosures that exceed regulatory requirements and increase compliance costs for small businesses. Meanwhile, a federal judge in New York blocked a $75 billion climate damages charge against major oil companies, ruling the law violated the dormant-commerce clause.

Regulatory scrutiny regarding “greenwashing” is also intensifying. In Australia, courts have imposed multi-million dollar penalties on firms including Fiducian Investment Management Services, Mercer Superannuation, and Vanguard Investments Australia for misleading sustainability claims. In New Zealand, the Financial Markets Authority has issued guidance requiring that sustainability-related claims be clear, substantiated, and consistent.