Sustainable finance rebounds as investors chase climate-transition profits

Sustainable investment attracted strong inflows after the pandemic, as market participants embraced the "doing well by doing good" mantra. The subsequent Ukraine war, coupled with higher borrowing costs, pressured green portfolios while defense spending and AI captured investor attention. Further setbacks stemmed from the Trump era’s opposition to environmental policies, the exit of large asset managers from carbon-neutral coalitions, and a fragmented global regulatory landscape.

Nonetheless, climate-related funding gaps have become more apparent after a summer marked by drought and extreme weather events. The sector is now promoting a narrative that aligns economic returns with the demands of a changing climate. This new focus on profitability will be a central theme at the Building Bridges sustainable finance conference in Geneva.