Sustainable finance has emerged as a cornerstone in the global shift towards environmentally and socially responsible economic models. Within this dynamic sector, Spain demonstrated significant progress in 2024, showcasing substantial advances in the issuance of sustainable bonds. Findings from the annual report by the Observatorio Español de la Financiación Sostenible[1] (Ofiso), published on February 14, 2025, highlight not only the scale of Spain’s commitment but also its potential to set benchmarks for other nations.
In 2024, Spanish companies, financial institutions, and public entities issued €24 billion in sustainable bonds, marking a 14% increase from the previous year. This growth outpaced the modest 2% increase observed globally, with total global issuances reaching €950 billion. Notably, this positions 2024 as the second-highest year for sustainable debt placements in Spain, trailing only 2021, when issuances reached €28 billion. The resilience of Spain’s ESG financing amid macroeconomic challenges—such as geopolitical instability linked to the war in Ukraine and rising interest rates—underscores the robustness of its sustainable finance market.
A key statistic in this upward trend is that 18% of Spain’s bond issuances, excluding government bonds, were categorized as sustainable. This proportion reflects a steady consolidation of ESG-focused financing in the country, reinforcing the narrative that sustainable investments are no longer peripheral but rather integral to modern capital markets.
Sustainable bonds in Spain primarily fall into three categories: green bonds, social bonds, and hybrid (or sustainability) bonds, each serving distinct purposes aligned with ESG objectives.
Green Bonds: Accounting for 75% of sustainable issuances, green bonds remain the dominant instrument. In 2024, €18.758 billion worth of green bonds were issued to fund projects aimed at mitigating environmental impacts, such as renewable energy and energy efficiency initiatives.
Social Bonds: These bonds, which target funding for sectors like healthcare, education, and affordable housing, represented €1.755 billion in issuances. While smaller in scale than green bonds, their focus on societal welfare underscores their importance in achieving balanced ESG outcomes.
Sustainability Bonds: Hybrid bonds, blending elements of green and social finance, totalled €3.6 billion. These instruments allow issuers to address multiple ESG goals simultaneously, further diversifying the sustainable finance landscape in Spain.
In contrast, sustainability-linked bonds—a category tied to issuers meeting specific ESG targets—saw minimal activity, with only €43 million issued. The decline in popularity of these bonds globally is attributed to a combination of unfulfilled ESG targets by issuers and the insufficient financial incentives for investors.
The leadership of major Spanish corporations and public entities has been instrumental in driving the growth of sustainable bonds. Among the most notable issuers in 2024 were Iberdrola, Telefónica, and CaixaBank, collectively accounting for nearly 40% of Spain’s total sustainable bond issuance.
- Iberdrola: The energy utility was the largest corporate issuer, raising €3.6 billion through green bonds. Iberdrola expanded its geographic footprint with its first green bond issuances in Australia and Switzerland, while also achieving a milestone with its largest-ever green bond issuance in pounds sterling (£500 million, approximately €600 million). The company’s three major euro-denominated issuances included a €700 million hybrid bond in January, a €750 million issuance in July, and another hybrid bond of €800 million in November.
- Telefónica: The telecommunications giant raised €2.9 billion, primarily through green bonds. Its January issuance of €1.8 billion was structured into two tranches, while its March issuance of €1.1 billion included a hybrid structure. Telefónica’s proactive approach to green financing exemplifies how non-financial corporates are increasingly integrating ESG into their funding strategies.
- CaixaBank: As a key player in sustainable finance, CaixaBank issued €2.8 billion in sustainable debt. Its March issuance of an €1.3 billion green bond and a €318 million issuance in Swiss francs underscored its commitment to environmental projects. Additionally, a €1 billion social bond issued in May aimed at financing loans for families, small businesses, and freelancers further diversified its ESG portfolio.
Public sector contributions were led by the Spanish Treasury, which reopened its 2021 green bond to raise €3.8 billion. This demonstrates the pivotal role of government initiatives in catalysing private-sector participation in sustainable finance.
Beyond bond issuances, Spain’s sustainable finance ecosystem, including loans and other credit facilities, exhibited an 8% growth in 2024, reaching €65.7 billion. Responsible loans and credit lines increased by 9%, highlighting the complementary role of debt instruments and traditional lending in driving ESG objectives.
EU Policies and Global ESG Financing
The European Union’s leadership in sustainable finance has been a crucial enabler for Spain’s progress. The adoption of frameworks like the EU Taxonomy for Sustainable Activities and ESG reporting obligations has facilitated a standardized and transparent approach to sustainable financing. As Julián Romero, president of Ofiso, noted, Europe’s influence extends beyond its borders, with other regions increasingly adopting similar practices. However, challenges persist, including rising scepticism towards ESG initiatives in certain markets, as exemplified by the growing influence of political leaders opposed to climate policies.
Spain’s remarkable achievements in 2024 highlight its potential as a model for ESG leadership. The robust growth of its sustainable bond market, driven by a diverse mix of green, social, and hybrid instruments, reflects the maturity and adaptability of its financial ecosystem. Moreover, the strong performance of major issuers like Iberdrola, Telefónica, and CaixaBank underscores the strategic alignment of corporate and public sector objectives in advancing sustainability goals.
On a global scale, Spain’s success underscores the viability of sustainable investments, challenging the notion that ESG considerations compromise returns. Data comparing the MSCI World Index with its ESG counterpart show similar performance over a decade, reinforcing the compatibility of financial and sustainability objectives.
As the world grapples with pressing environmental and social challenges, Spain’s sustainable bond market serves as a beacon of innovation and commitment. By fostering an ecosystem that balances environmental responsibility with economic resilience, Spain demonstrates how nations can leverage financial markets to achieve sustainable development goals. While challenges remain, the Spanish case offers valuable lessons for global policymakers, investors, and corporations seeking to align financial strategies with the imperatives of a sustainable future.
Data Source: Observatorio Español de la Financiación Sostenible (Ofiso), February 2025.
[1] Informe-Anual-OFISO-2025.pdf
