In 2026, energy security and affordability considerations will drive sustainability strategies, while the costs of physical climate risks and insurability concerns become more acute. The impact of AI on power demand, labor markets and data governance will also be more apparent amid rising social risks. In this report, we look at the key trends in sustainable finance that will shape credit strength in 2026 and beyond.
Key takeaways:
- Energy security concerns drive pragmatic approach to transition. Cost competitiveness will support spending on low-carbon energy alongside incremental fossil-fuel investment, amid rising power demand. Geopolitical tensions and stalling multilateralism will also put the spotlight on resource efficiency and supply-chain resilience. Businesses will contend with ongoing policy fragmentation and volatility.
- Adaptation and resilience increasingly central to credit quality. As extreme weather events become more frequent and severe, investment in adaptation and resilience will be key to mitigate risk and support credit strength. Public-sector focus on managing and containing risk, including supporting insurability in high-risk markets, will intensify. Businesses will increasingly disclose adaptation strategies and investment to stakeholders, including regulators and lenders.
- Focus on natural-resource management sharpens as risks bubble up. The interlinkages between carbon transition, physical climate and other environmental risks will drive policy and market focus on natural-resource management. Risks around resource availability and supply-chain disruptions put the spotlight on issues such as deforestation practices in agriculture and water consumption by data centers.
- Budgetary pressures, and climate and digital disruption exacerbate social disparities. The rising cost of basic services, including electricity, will continue to fuel voter dissatisfaction with mainstream political parties in advanced economies (AEs). Meanwhile, climate shocks are compounding concerns around food security in emerging markets (EMs). Amid rapid AI adoption, personal-data protection, data sovereignty and governance are emerging as key policy topics, with fragmented regulation increasing compliance costs for businesses.
- Financing capacity and risk management will shape credit pressures. Growing private credit markets and mechanisms such as blended finance and blue bonds present opportunities for capital mobilization and could narrow investment gaps.