As sustainable investment professionals, it’s easy to feel overwhelmed with the ever-changing geopolitical challenges we are facing. Yet, for those of us who remain optimistic, there are still plenty of reasons to be hopeful about the future of sustainability. Here are a few highlights that inspire confidence and remind us why we got into sustainability in the first place.
1. Legacies of the US Inflation Reduction Act will live on
More than 100 green infrastructure projects have broken ground or started construction after receiving support from the Inflation Reduction Act (IRA). These include projects for battery storage, electric vehicles, grid electrification and wind and solar energy. For example, the IRA made it more attractive for private investors to fund large-scale renewable energy projects like the Roscoe Wind Farm in Texas. The expansion added 500 megawatts (MW) of capacity, bringing the total to over 1,500 MW, which can power more than 400,000 US homes. Furthermore, green infrastructure projects have come online in Florida, Georgia and Arizona. While the future of the IRA remains uncertain, I am optimistic that the groundwork has been laid, making it challenging to reverse local projects that create jobs and infrastructure in Republican states.
2. Investment going to green infrastructure in the UK
In the UK, we closed the last coal-fired power plant in 2024 and are creating innovative ways to support low-carbon energy systems. The first Capital Markets Mechanism bond, issued by the Climate Investment Fund in January 2025, raised approximately £400m for renewable energy, sustainable transport and other clean energy projects. In 2024, bond investors provided additional financing for the Thames Tideway super-sewer, which will capture around 39 million tonnes of sewage, diverting it from the River Thames. Investors also provided finance to Offshore Electricity Transmission Owners (OFTOs) which help connect offshore wind farms with the electricity grid. This critical infrastructure has supported the build-out of the Dogger Bank Wind Farm off the coast of the UK. It is the world’s largest offshore wind farm and can power up to six million homes.
3. International opportunities are out there
The world offers many great investment opportunities beyond the UK. Bank Rakyat Indonesia Persero is making a difference with a significant portion of its loan portfolio dedicated to renewable energy, sustainable agriculture and environmental products. It focuses on micro-finance, lending to small businesses, and supports financial literacy programs. Similarly, Novo Nordisk is transforming health through new obesity drugs, improving cardiovascular health, lowering blood pressure, and regulating blood sugars and insulin levels. Not only is this enhancing people’s quality of life, but it can also reduce long-term healthcare costs for struggling economies.
4. Technology is driving sustainability innovation
Tech firms stand to benefit from the new US administration. Despite concerns about AI and large language models, these technologies can drive better sustainability outcomes. Blockchain can trace products from ‘farm to fork’ or ‘mine to machine,’ ensuring responsible sourcing. Car manufacturers are using digital identities to trace lithium for electric vehicles. Carrefour uses blockchain to trace food origins, allowing customers to scan QR codes for product information. AI can also provide more accurate and faster cancer diagnosis. A new initiative by the NHS will use AI to analyse 700,000 mammograms within the next few years. If successful, early detection will save lives and lower the cost of cancer care.
5. Companies and investors still care
Despite negative headlines about companies pulling back from diversity, equity and inclusion (DEI) initiatives or climate commitments, many still care. Costco has defended its DEI practices, citing their role in fostering creativity and innovation. JPMorgan’s CEO also supports DEI because he serves a diverse customer base. In the UK, investors like the People’s Pension and Brunel Pension Partnership have issued a public letter re-emphasising the importance of climate stewardship. This statement was issued off the back of several banks and investment firms withdrawing from Climate Action 100+ and the Net Zero Asset Managers initiative. Sweden’s AP7 and NEST in the UK are also steadfast in their views on the importance of addressing climate change. This could be a market opportunity for asset managers ready to meet the climate demands of sophisticated asset owners.
Conclusion
While the geopolitical landscape is presenting significant challenges, we must remember there are reasons to be optimistic. The enduring legacies of many global administrations, ongoing investment in UK green infrastructure, technological innovation, and international investment opportunities all provide a glimmer of hope for sustainability. Between the depressing headlines and political uncertainty, as sustainability professionals, we must stay focused on the positives driving real world change and the progress that is continuing to be made globally.
