The Green Bond Boom: How STOXX and ICE Are Redefining Sustainable Investing

The bond market's green revolution is here. On June 2, 2025, STOXX Ltd. and Intercontinental Exchange (ICE) launched a groundbreaking collaboration to create fixed income climate indices, a move that could supercharge sustainable investing and ETF growth. This partnership isn't just about data—it's about transforming how investors approach climate risk and opportunity in one of the largest asset classes on the planet.

The Power of Partnership: STOXX's Sustainability Meets ICE's Infrastructure

STOXX, part of the ISS STOXX group, brings decades of expertise in sustainability data and index design. Its climate methodologies now combine with ICE's unparalleled fixed income pricing and reference data infrastructure—a pairing that creates benchmarks as precise as they are forward-thinking.

The stakes are massive: global fixed income ETF assets under management (AUM) surged to $2.6 trillion by late 2024 and are on track to hit $6 trillion by 2030, according to BlackRock's Brett Pybus. The new indices aim to capture a growing slice of this market by addressing a critical gap—investors seeking climate-aware bond exposure without sacrificing liquidity or transparency.

Proof in the Pudding: The eb.rexx Blueprint

The collaboration already has a proven blueprint. STOXX's existing eb.rexx Bond Indices, which track German government bonds and rely on ICE's data, had $3.2 billion in ETF AUM as of May 2025—over $2.9 billion of which flows through iShares ETFs. This success isn't accidental. By leveraging ICE's real-time pricing and STOXX's rigorous methodologies, these indices deliver granular access to niche markets. The new climate indices will apply the same logic to sustainability themes, offering investors precise exposure to low-carbon bonds or climate-resilient issuers.

The Demand Isn't Just Growing—It's Exploding

Climate-conscious fixed income isn't a fad. The European Commission's push for green bond standards, coupled with corporate and sovereign issuers' rush to meet net-zero targets, has created a $2.7 trillion climate bond market by 2024. Yet, traditional bond indices often lag in reflecting this shift. STOXX and ICE's indices, designed to exclude carbon-intensive sectors and incorporate ESG metrics, could become the gold standard for investors seeking to align portfolios with climate goals.

Why This Matters for ETF Investors

The ETF boom isn't confined to equities. Fixed income ETFs, which now dominate the market with $2.6 trillion in AUM, are primed for further expansion. The STOXX-ICE indices could fuel this growth by addressing two key investor pain points:
1. Transparency: Climate indices will offer real-time data and methodology disclosures, critical for ESG-focused investors.
2. Liquidity: ICE's infrastructure ensures these indices can scale efficiently, attracting both retail and institutional capital.

Consider the iShares Europe Defence UCITS ETF (DFEU), which tracks STOXX's Targeted Defence index. Launched in May . . . . 2025, it's already drawing inflows by targeting companies benefiting from EU military spending. A similar model for climate indices could replicate—or even eclipse—this success.

The Regulatory Tailwind

Regulators are pushing harder than ever. The EU's Sustainable Finance Disclosure Regulation (SFDR) and the European Benchmark Regulation (EBR) now mandate transparency in ESG claims. STOXX's indices, administered under the EBR, already meet these standards. This isn't just compliance—it's a competitive edge. Investors will increasingly favor indices that pass regulatory muster, making STOXX and ICE's collaboration a must-watch space.

The Bottom Line: Act Now or Risk Missing the Boat

The bond market's green transformation is underway, and STOXX and ICE are at the vanguard. With fixed income ETFs set to triple in size by 2030, the firms' climate indices could become the backbone of sustainable fixed income portfolios. Investors ignoring this shift risk falling behind.

The question isn't whether to engage—it's how to do it effectively. Look for ETFs tracking these indices (like the upcoming STOXX-ICE Climate Bond Index ETF) and prioritize those with low fees and high liquidity. This isn't just about ethics—it's about capitalizing on a structural shift in finance.

The clock is ticking. With climate risk now a core consideration for institutional investors and regulators alike, the time to act is now. Don't let this $6 trillion opportunity slip away.

DISCLAIMER: The author is not affiliated with STOXX or ICE. Past performance does not guarantee future results. Consult your financial advisor before investing.