Sustainable Finance Outlook Highlights

Geopolitical disruption and extreme weather will accelerate the transition to a clean energy system. We see two drivers: a larger part of energy consumed will be electricity, and a larger share of the electricity will come from non-fossil sources. Over the coming 5-10 years, we expect a sharper decline in fossil energy’s share of the world’s primary energy supply.

Sustainable bonds reached USD 1226bn resulting in a 15% YOY growth despite geopolitical headwinds. Electricity dominates CBAM sector sustainable bond issuance pointing out a lack of incentives for heavy industry to invest in decarbonization. Upstream built environment sectors lead sustainable bond issuance, while the downstream, most affected by EU ETS, sees low issuance volumes.

Sustainable bonds reached USD 1226bn resulting in a 15% YOY growth despite geopolitical headwinds. Electricity dominates CBAM sector sustainable bond issuance pointing out a lack of incentives for heavy industry to invest in decarbonization. Upstream built environment sectors lead sustainable bond issuance, while the downstream, most affected by EU ETS, sees low issuance volumes.

Under the Commission’s proposal, EU ETS prices could reach EUR 180–270/t by 2040, increasing steel prices by 50–100% and cement by 80–135%. Building costs may rise by up to 3%, yet developer margins could fall by 15–40%, depending on portfolio mix, incentivising value chain efforts to cut building material emissions and low-carbon alternatives.

In the podcast series Transition in Numbers, host Lina Apsheva takes a closer look at the key numbers behind the transition, its progress, and the challenges and opportunities that lie ahead. 

SEB flagship report Sustainable Finance Outlook provides insights and market intelligence for navigating the sustainability transition. The report includes regular updates on energy transition investment, sustainable finance markets and regulations as well as topical research.