“Energy transition investments reached a new all-time high of USD 2.3tn in 2025, driven by increased investment in grids, storage and electrified transportation” says Thomas Thygesen, Head of Strategy and ESG in SEB Equity Research at SEB. “China tops the investment league, allocating 4% of GDP each year to transition investment, almost twice as much as Europe which needs to catch up.”
“Electrification and ultimately digitalization are underlying drivers of transition investment” says Thygesen. “In the new production model powered by AI and robots, the cost of electricity will be more important than the cost of labour, and circularity will be embedded in the production process.”.
The report also features an update on the sustainable finance market and how it has funded circular economy innovations and business models.
“Global sustainable finance issuance reached USD 2.2 trillion in 2025, marking the second-best year despite political challenges.” says Gregor Vulturius, Lead Scientist and Senior Advisor in Climate & Sustainable Finance at SEB. “Our need for greater supply of clean, affordable and resilient energy supply will drive European green bond growth to USD 370 billion in 2026.”
“Circular economy is increasingly adopted in sustainable finance, with over 25% of all sustainable bonds incorporating circular economy as a category.” says Samantha Arpas, Sustainable Finance Specialist at SEB. “Increasing number of corporate bonds including circularity highlight the sector’s growing commitment to circular manufacturing practices, material efficiency, recycling, and waste reduction.”
About the Sustainable Finance Outlook
The Sustainable Finance Outlook delivers insights and market intelligence for navigating the sustainability transition. Issued four times per year, the report engages a readership exceeding 3000, comprising financial institutions, corporates, and decision-makers within SEB's primary markets.