Why emerging managers drown and how to avoid their fate

Issuance of green bonds and loans climbed to $947bn for the year as of December 2025 in response to growing demand for renewable energy generation and infrastructure. The record levels of green debt come at a time when the US administration has drastically scaled back sustainability requirements and president Donald Trump has promoted fossil fuels over renewable energy sources, while the EU is also easing reporting requirements. Companies and government-linked issuers in the Asia-Pacific region have raised $261bn this year, a 20% increase from 2024, with a record $138bn worth of green bonds issued by China and its private companies.

Europe's biggest banks are no longer prioritising climate action, according to an analysis by responsible investment group ShareAction. The report finds that progress towards climate goals has either stalled or deteriorated at 25 of Europe's major banks, with only four institutions fully excluding financing for new oil and gas projects. Major lenders such as HSBC and NatWest have pulled back from their pledges to withdraw from clients with high emissions while the average score for managing environmental and social risks stands at just 41%. In addition, five banks have softened their sustainable finance targets set in 2024, leading to calls for stricter regulatory oversight and the introduction of mandatory transition plans.

The insurance industry can help address the persistent gap in climate finance, particularly in emerging markets vulnerable to the effects of climate change, according to industry experts. While statistics indicate that actual default rates in developing economies are similar to those in advanced economies, the private sector can be reluctant to invest due to perceived risk. Insurers can make climate projects more attractive to investors by offering risk assessment, modelling and resilience expertise. According to industry experts, early engagement from insurers, regulatory reforms and enhanced public-private partnerships are needed to unlock private capital and expand climate-aligned investment.

Global climate technology investment has risen sharply, exceeding $312bn between 2014 and 2024, with North America accounting for 45% of venture capital deal value. Analysts say long-term growth will depend on operational discipline, robust supply chains, commercial diversification and experienced leadership. However, changes to the US stance on climate under the Trump administration have bred uncertainty, with economists forecasting a 53–59% decline in US clean power additions by 2035. The buildout of infrastructure to support AI growth has pushed up power demand, leading venture capital to shift focus toward grid, storage and power equipment investments.

Australia's impact investing market has grown nearly eightfold since 2020 to more than $157bn, according to a benchmarking report by Impact Investing Australia and the UNSW Centre for Social Impact. The study indicates that impact investments have outperformed expectations in both financial and social returns, but the sector is still regarded as underdeveloped compared with global counterparts. The report urges increased federal support to stimulate further private investment, particularly in housing and regional development.

US non-profit impact investor Acumen has raised $250m (€214m) in blended capital for its Hardest-to-Reach Initiative, which is developing clean energy projects in sub-Saharan Africa. The initiative, which was launched in 2023 with $65m (€55.7m) in funding from the Green Climate Fund, has already reached 50 million people in 17 countries, including 50 million first-time energy users.

The UK government's National Wealth Fund has provided an £800m financial guarantee for a £1bn 12-year syndicated bank borrowing facility to power transmission company Scottish and Southern Electricity Networks. The green loan will be used to finance four projects to upgrade the electricity transmission network in the north of Scotland. The island of Orkney will be connected to the transmission grid for the first time and other communities will receive upgrades to enable their transmission systems to handle increased volumes of electricity from wind and marine generating facilities.

Renewable energy companies are taking a US federal agency to court after it ordered work to be halted at several offshore wind projects in a case that could determine the future of the industry under president Donald Trump. US utility group Dominion Energy, which is constructing an almost-complete wind farm off the Virginia coast, and Denmark's Ørsted and BlackRock-owned Skyborn Renewables, which are partners on another project off Rhode Island, have filed legal complaints against the US Bureau of Ocean Energy Management, which imposed a stoppage order during a pause on leases for large-scale offshore wind ordered in February by the Trump administration, citing national security risks.

The 2025 Moskowitz Prize at Northwestern University has been awarded to Caroline Flammer, Thomas Giroux and Geoffrey Heal for their analysis of blended finance transactions by development finance institutions, which found that concessionality is associated with greater impact and higher risk. An honourable mention was given to Elroy Dimson, Oğuzhan Karakaş and Xi Li for their examination of the effectiveness of coordinated environmental and social shareholder engagement. Both studies provide practical guidance for impact investors and policymakers.

The Global Green Growth Institute and the National Solar Energy Federation of India held an investment conference in New Delhi last month aimed at advancing floating solar and pumped storage projects in the Indian state of Odisha. Representatives from government agencies, state utilities, financial institutions, investors, international organisations and research institutions discussed policy frameworks, financing mechanisms and opportunities for public-private partnerships to unlock Odisha's clean energy potential. The event underscored the importance of floating solar in addressing land constraints and highlighted the grid stabilisation benefits of pumped storage.

More than half of global infrastructure investors have faced failures in energy and environment transactions over the past three years, according to research by risk consultancy S-RM. Shifting government policies, regulatory unpredictability and sustainability risks have eroded investment confidence, particularly in renewable energy. Geopolitical tensions and trade disputes, especially between the US and China, have added further complexity to deal-making. Most investors expect risks to intensify, which could impede advances towards net-zero targets that depend on private-sector capital.

India has passed legislation that will allow private and foreign companies to invest in the nuclear power sector, including in areas such as mineral exploration, fuel fabrication and equipment manufacturing. The legislation amends liability provisions, consolidates existing regulations and creates an independent safety authority and tribunal. According to the government, these reforms are intended to attract investment and advanced technology to support India's 100 GW nuclear capacity target by 2047, while the state will continue to oversee sensitive operations.

Canada's government has asked the Canadian Climate Institute to draw up a sustainable investment taxonomy for the country, with a launch planned before the end of 2026. The taxonomy will provide the criteria for identifying green or transition investments and is designed to support and encourage investment flows into priority sectors.

Indonesia's reliance on coal, which accounts for 68% of the country's electricity generation, leaves the energy sector exposed to market volatility and fiscal pressures, according to an analysis by the Institute for Energy Economics and Financial Analysis. Currently, 16% of the country's power comes from renewable sources and the government has delayed its target of raising this to 23% to 2030 from 2025. Progress is constrained by structural obstacles, sluggish procurement processes and limitations in the electricity grid. Without regulatory reform and investment in infrastructure, Indonesia risks losing out on global capital and falling behind regional peers in attracting clean energy investment.