Transition investing, or investing in emission-reducing activities, has not become obsolete in 2025. Global investment amounted to about $2.1 trillion in 2024, led by renewables, electric vehicles, and grids. China is now firmly in the lead; the United States is holding steady; the European Union dropped relative to 2023.
However, the world is investing far below what is necessary to stay on a net-zero path this decade. Investor sentiment is mixed and while large investors still back climate action, but require stable policies and credible company plans, retail investors are becoming more engaged, though they still have to navigate confusing labels and disparate disclosures.
Regulations are moving in different directions. The United States’ federal climate-disclosure rule is on hold. In Europe, reporting obligations are being streamlined to alleviate burdens for companies, and despite potential further changes, we hope companies will still be requested to publish simple and credible transition plans and progress.
Our review of five big financial groups discovers patchy transparency on the side of capital expenditure directed towards green, sustainable, or transition activities. Some of the biggest opportunities lie within grids, renewables and their storage, along with financing actual emission reductions in heavy industries, accompanied with strong safeguards in place. Clear labels and clear reporting in plain English will help professionals and individual savers alike to put capital, where it makes the most difference.
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