Green investments are gaining momentum in 2025 as capital shifts towards energy efficiency and cleaner infrastructure. Globally, green bond issuance has crossed $5 trillion, while annual sustainable bond issuance was at $1 trillion in 2024.
In the domestic context, a study by the Council on Energy, Environment and Water (CEEW), a non profit policy research organisation, published on November 25, 2025, estimates cumulative green investment opportunities of about `360 trillion by 2047. This implies an annual green market opportunity of $1.1 trillion across clean energy, low carbon transport, industry transition and circular economy segments, signalling that green finance is moving into financial mainstream.
What are Green Investments?
1 January 2026
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These investments channel funds into renewable energy, clean transport, efficient infrastructure, and environmental upgrades.
These investments include bonds or loans that are labelled as green or are sustainability related. Mutual funds or thematic funds that invest substantially in these companies or sectors are also labelled green investments.
Real green bond investments are followed by a documented use of proceeds tied to well-defined projects which are climate-related.
Green investments follow 2025 Climate Finance Taxonomy (CFT), governance from Securities and Exchange Board of India (Sebi) and Business Responsibility and Sustainability Reporting (BRSR).
How Do These Fare Financially
Returns from green bonds are similar to that of conventional bonds, but they fare better during crises.
Equity and thematic funds related to the green sectors grow during rising demand for clean infrastructure.
Returns on green investments depend on execution, policy support, and market conditions.
Liquidity in some labelled bonds can be weaker compared to conventional bonds.
Demand for sovereign green issuances can be volatile, leading to price and subscription level changes.
These suit people who are comfortable with medium- to long-term horizons.
Factors to Check Before Investing
Check the “Use of Proceeds Certification” from stock exchange filings or the company’s website to confirm climate projects financing.
Assess the credit quality of the issuer since labels do not always determine the actual risk.
Check liquidity as some green bonds trade in smaller secondary markets.
Review the coupon rates and maturity and ensure they fit with your financial goals.
For funds, review portfolio composition to ensure meaningful exposure to climate-focused sectors.
Look at the past performances to get an idea about long-term returns in these investments.
