Discover our Responsible Investment Views for 2025, highlighting the key trends shaping the future of sustainable finance: the normalisation of responsible investment, the energy transition shift and acceleration, the increased demand for real-world impact financial products, and the need for international alignment for regulation.
Key areas to watch in 2025
- Momentum shifting to clean energy investments: clean energy added $320 billion to the world economy in 2023, outpacing fossil fuel investments at a close to 2:1 ratio. We expect this ratio to continue to expand, driven by a widening competitive gap.
- Geopolitical shifts to impact energy transition: policy packages will continue to drive investments in clean technologies, with a need to overcome remaining barriers to clean energy development in developed economies while also paving the way for increased investments in EMDEs.
- Physical risks are materializing: the effects of climate change will keep on intensifying, impacting companies' value chains, leaving no options but to take action. The interrelation of environmental and social crises – across the nexus climate-biodiversity-health-food-water – is putting many business models at risk.
- A continuing interest for responsible investments: appetite will remain strong despite political challenges, with 54% of investors indicating they are likely to increase their allocation to responsible investment in their portfolios.
- All eyes turned on "outcome-oriented" products: the drive for tangible real-world impacts will fuel demand for innovative financial solutions in 2025, including green bonds, nature-debt swaps, and various impact investments.
- The sustainability toolbox is expanding: new metrics that focus on biodiversity, social factors, and real-world indicators are expected to enhance sustainability frameworks and improve risk management assessments, including climate stress tests
- A need for client-centric approaches: taking better account of investors’ heterogeneity and variable needs, and of the practical reality of financial product distribution will be crucial to really give investors the ability to express their sustainability preferences.
- Streamlining regulatory frameworks: streamlining complex regulations will be essential to improve investor understanding and accessibility in sustainable finance, ultimately fostering greater accessibility to Responsible Investment products.
- Addressing regulatory divergence: in a context of increased regulatory fragmentation, we expect greater focus on international alignment and interoperability, with the view to facilitate compliance for corporations and financial institutions.
The coming years are critical for a sustainable and inclusive transition to a low carbon economy. Investment in clean energy technologies is significantly outpacing spending on fossil fuels — with every dollar going to fossil fuels today, almost two dollars are invested in clean energy, and this momentum is expected to continue.
