"It is fair to say that over the past 1-2 years doubts have crept in about the clean energy transition after the surge in investments from 2020-2022 gave way to flatlining in 2023-2024," says Thomas Thygesen, Head of Strategy and Sustainability in SEB Equity Research. "In our view, this is likely noise driven by a change in political priorities. The reason why we think the green energy transition is unstoppable has never been about the politics - it was always about the revolutionary technological potential of renewable energy." 

"The coming AI economy will be fully electrified and renewable energy is the only financially and environmentally viable alternative," says Thomas Thygesen. "The only thing we can influence is the speed of the transition, and here policymakers have a challenge in both Europe and the United States to catch up with China." 

The report also features an update on the sustainable finance market. Until the end of July, USD 929 billion in new sustainable debt has been transacted globally. This is USD 70 billion more than in the first seven months of 2023, driven by increases of more than 20 per cent in sustainable bond issuance in North America and by Supranational Institutions. However, sustainability-linked bonds (SLBs) continue to struggle with new issuance reaching their lowest point since 2020. 

"A third of European SLBs have either missed or are on track to miss their sustainability targets, with the majority of KPIs that are not on track to meet their targets relating to greenhouse gas emissions," says Gregor Vulturius, Lead Scientist and Advisor at Climate & Sustainable Finance at SEB. "We continue to believe that SLBs allow for an additional level of engagement between issuers and investors, which benefits from increasing standardization and transparency."

The report also contains contributions from the Global Water Intelligence on the necessity to more than triple global investments in water management. The report also includes a detailed market outlook for water technologies from SEB Climate & Sustainable Finance as well as a deep-dive in water-related regulation and an update on SEB Water Equity basket.   

About The Green Bond report
SEB, which together with the World Bank developed the green bond concept in 2007/2008, publishes the research publication The Green Bond 5-6 times a year. It strives to bring readers the latest insight into the world of sustainable finance through various themes. Even though the report covers all kinds of products and developments in the sustainable finance market, we have decided to keep its historic name - The Green Bond - as a tribute to our role as a pioneer of the green bond market. You can find The Green Bond report at sebgroup.com.