The market for “green bonds” has great growth potential as the demand for sustainable investments and the supply from governments and companies looking to finance environmentally conscious projects are on the rise, suggests a new report from Moody’s Investors Service Inc.

The New York-based credit-rating agency says in its report that the growth potential in the market for green bonds, which raise capital for projects designed to combat climate change or enhance environmental, is “considerable as budding U.S. and European markets become more sophisticated and developing countries like India and China explore their use for the first time.”

In fact, the volume of green bonds sold in 2014 tripled from 2013 to almost US$37 billion, the Moody’s report says, citing data from the Climate Bonds Initiative, adding that issuance of these bonds is expected to triple again, to US$100 billion, in 2015.

“We expect the global green bonds market to continue growing as more issuers with varying credit profiles emerge, especially as countries such as China and India move toward more eco-friendly economies,” says Falk Frey, senior vice president with Moody’s.

As an example, the Moody’s report notes that Yes Bank Ltd., a large commercial bank in India, sold the country’s first green bond in March. Furthermore, the report adds that, at the same time, China’s plan to open its debt capital markets “could increase access to the country’s large domestic savings’ pool and provide transformational opportunities for green bonds.”

In addition, the Moody’s report notes that corporate and municipal issuance of green bonds surpassed issuance by development banks for the first time in 2014. This signals a “sea change” from the early days for green bonds, when they were only sold by development banks, the report notes. As well, the number of currencies they are being issued in has expanded to 16 as of 2014 from only euros and U.S. dollars.

On the demand side, the Moody’s report notes that investing in green bonds fits well with investors who are increasingly following sustainable responsible and impact (SRI) investing mandates. In fact, the report notes that SRI investing may now account for as much as 35% of professionally managed assets worldwide.

Yet, the credit-rating agency also cautions that current standards and levels of accountability in this market still leave a dent on investor confidence. “While companies and municipalities issued 46% of the total last year, figures have dropped so far this year,” Frey says. “This drop is not helped by investors’ concerns about standards and level of accountability in green bonds and corporates not seeing any pricing benefits over standard bonds.”