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Saudi Arabia and the UAE represented 68% of all ESG sukuk issuance at the end of nine-months 2025, with GCC countries holding over half of all outstanding ESG sukuk at the end of the same period, according to a new report by Fitch.
Aside from the GCC, Malaysia, Indonesia and Pakistan have also been key players in ESG sukuk issuance in 2025.
“This year has already recorded the highest annual ESG sukuk issuance, with a healthy pipeline ahead. The highest quarterly issuance on record was in 3Q25, with most issuance being non-sovereign,” Fitch said.
The report noted that ESG sukuk formed more than 40% of Emerging Markets ESG US dollar debt issuance (excluding China) in 9M25, up from the 18% reported over the same period last year.
Subordinated ESG sukuk was also on the rise, with issuance, all from Saudi issuers, nearing $5 billion at end-9M25. “This makes 2025 the most active year for this segment,” Fitch added.
The ratings firm expects ESG sukuk to retain a prominent role in emerging markets, with momentum likely to remain solid into 2026.
“We expect ESG sukuk issuance to maintain strong momentum into 2026, fuelled by robust demand, regulatory support, and sustainability mandates,” said Bashar Al Natoor, Fitch’s Global Head of Islamic Finance. “Risks such as oil price volatility, greenwashing and evolving sharia requirements persist, but fundamentals remain solid – ESG sukuk comprise around 40% of ESG debt outstanding across OIC countries.”
Globally, ESG sukuk issuance surged by 46% year-on-year to $13.5 billion by end-9M25, a full-year record, with 3Q25 the quarter of highest issuance at over $6.5 billion. More than 75% of issuance was dollar denominated.
Corporates and financial institutions each accounted for more than 40% of total issuance, while sovereigns represented about 13% as of end-9M25.
Global ESG sukuk outstanding rose by 23% yoy and about 13% quarter on quarter in 3Q25, to over $55 billion, across all currencies).
(Writing by Bindu Rai, editing by Seban Scaria)
