Moody's sets out its 2026 Outlooks: sustainable debt resilience and rising ESG-driven credit risks
Moody’s has released its 2026 Outlook reports, highlighting two parallel dynamics shaping global markets: a resilient but regionally uneven sustainable debt market, and mounting credit risks driven by climate transition shifts, extreme weather and the rapid expansion of artificial intelligence. Together, the outlooks provide a forward-looking view on how sustainability, technology and geopolitics will influence capital allocation and credit strength in the year ahead.
Transition, adaptation and digital needs will drive sustainable debt
Global sustainable bond issuance is forecasted to stand at $900 billion in 2026, broadly flat from 2025. Addressing climate mitigation and adaptation gaps will support investment, even as political headwinds and competing priorities curb volumes in some regions. Environmentally focused projects will continue to dominate, as new investments in transition, adaptation and digital infrastructure complement activity from a deep pool of repeat issuers. Links with environmental risks will keep social considerations in the spotlight, even as dedicated social proceeds remain limited.
Transition shifts, extreme weather and AI boom drive credit risks
In 2026, energy security and affordability considerations will drive sustainability strategies, while the costs of physical climate risks and insurability concerns become more acute. The impact of AI on power demand, labor markets and data governance will also be more apparent amid rising social risks. In this report, we look at the key trends in sustainable finance that will shape credit strength in 2026 and beyond.
*The full Outlook reports are available free of charge from Moody’s (registration required to access).