This quarter’s developments suggest a shift in what is driving the clean energy transition. The green economy continues to expand, with growth in revenues from environmental products, climate tech exits, and clean energy market values despite a less supportive U.S. policy environment and growing political resistance to ESG. At the same time, recent energy disruptions have highlighted that investments in clean energy are increasingly motivated by energy security, reliability, affordability, and rising power demand – not just climate goals. Across the sector, capital is flowing most toward technologies tied to electrification, grid reliability, and new power needs associated with AI and economic growth. The result is a more pragmatic investment landscape, where momentum remains strong but is increasingly concentrated in areas with clear economic and strategic advantages.
Bloomberg Green: Climate Tech Sees Record-High Deals as Power Demand Fuels Market Appetite
An analysis of climate tech exits shows that the sector is beginning to reopen a capital markets channel that has been largely shut since the higher-rate environment pressured venture-backed clean technology companies. According to Currence, the global climate technology sector recorded 153 public listings and acquisitions in the first half of 2026, a 70% increase from the prior year period and the busiest first half on record for deal activity. Initial public offerings also staged their strongest showing since 2022, with 17 climate tech companies listing publicly and raising a combined $6.7 billion. The rebound is important because it can help restore the venture capital funding cycle: investors that had been reluctant to commit new capital without visible exits now have a clearer path to liquidity. The recovery, however, is relatively narrow. More than one-third of acquired companies and nearly 60% of IPOs were concentrated in energy, reflecting investor demand for technologies that can help power artificial intelligence data centers and broader electrification. Companies such as Fervo Energy, X-Energy and Forgent Power Solutions accounted for roughly 65% of IPO proceeds, underscoring that public markets are rewarding clean power and grid-adjacent businesses far more than other climate subsectors. Taken together, these trends point to a selective recovery, with capital flowing most readily toward businesses tied directly to power scarcity, electrification and energy security.
Columbia Center on Global Energy Policy: New Analysis Shows That After the OBBBA, Most of the Power Sector’s Clean Transition Still Stands
Columbia’s overview of Lily Bermel’s analysis of the U.S. power sector offers a more nuanced assessment of the policy changes than many of the immediate reactions following passage of the One Big Beautiful Bill Act. The legislation is expected to reduce clean energy deployment and emissions reductions relative to the IRA pathway, and the costs – fewer incentives, slower coal retirements, higher fossil fuel utilization, project cancellations, and job losses – are meaningful. Even so, a substantial share of projected clean energy growth remains intact, supported by state policies, existing incentives, favorable economics, and increasing electricity demand. Using Energy Innovation’s Energy Policy Simulator to compare an IRA trajectory with an OBBBA scenario over 2025 to 2035, the analysis finds that the current policy environment preserves 74% of new clean capacity, 71% of new clean generation, and 67% of emissions reductions that the IRA trajectory would have delivered relative to 2021. The analysis also underscores that building more clean energy is not necessarily the same as achieving deep emissions reductions. Wind, solar, and storage can address much of the clean electricity gap, but replacing fossil generation entirely will require reliable low-carbon resources that can operate when renewable generation is unavailable. That challenge increasingly places attention on geothermal, nuclear, carbon capture, hydrogen, and other sources of firm power, as well as the transmission and permitting infrastructure needed to deploy them at scale.
Bloomberg Green: Green Economy Tops $10 Trillion as Revenue Growth Picks Up
The London Stock Exchange Group’s (LSEG) green economy analysis provides a data-driven counterweight to the view that clean industries are fading under political and market pressure. LSEG estimates that the green economy, defined as the revenue exposure of listed companies to environmental solutions such as renewable energy, clean water, energy efficiency and recycling, has reached a record $10 trillion in market value. Revenue from environmental products and services climbed to $5.5 trillion last year, expanding at its fastest pace since 2022. The breadth of the growth is notable with 99 of 133 green product and service categories posting revenue gains and electric vehicles and advanced batteries contributing an additional $62 billion. Public market performance has also improved, with companies generating more than 20% of revenue from green activities outperforming the broader equity market, while the S&P Global Clean Energy Transition Index has risen more than 80% since the end of 2024, more than twice the return of the S&P 500 over the same period. LSEG’s analysis also highlights the strategic dimension of the transition, arguing that green industries are being driven not only by decarbonization but increasingly by energy security and economic competitiveness. Even with policy shifting back toward domestic oil and gas production, the U.S. remains the largest green economy by market capitalization, accounting for 57% of the global total. The core message is that clean economy growth has become broad, measurable and increasingly embedded in mainstream equity markets.
Bloomberg Green: Iran Shock Jolts Asia and Europe to Speed Up Energy Transition
The Iran oil shock highlights how concerns about energy security can accelerate investment in clean energy, electrification, and distributed power systems. The effective closure of the Strait of Hormuz, through which roughly one-fifth of global oil and gas normally moves, has turned affordability concerns into a strategic vulnerability for energy importing countries. In the Philippines, the government has paired near-term relief measures with low-interest loans for residential clean energy, enabling households to install solar and batteries and reduce exposure to volatile utility bills. Europe’s response to Russia’s invasion of Ukraine offers the closest recent precedent as countries initially relied on expensive LNG but also accelerated wind and solar deployment, particularly in markets such as Spain, Portugal and Hungary. The Iran shock appears to be extending that logic across Asia, where LNG’s reputation as a reliable bridge fuel has weakened and policymakers are increasingly describing renewables and electrification as national security tools. However, the transition has not been linear. Some countries have temporarily increased coal use, and Pakistan, Japan, China and India have all seen fossil generation respond to supply constraints and demand growth. But the crisis is also accelerating subsidies, tax breaks and policy support for rooftop solar, batteries, heat pumps and electric vehicles. Energy security and affordability are now reinforcing the case for distributed clean energy and electrification.
Bloomberg Green: Why Sustainable Finance Hasn’t Moved the Needle on Climate Change
Lisa Sachs, director of the Columbia Center on Sustainable Investment, argues that disappointment with sustainable finance reflects unrealistic expectations as much as investor behavior. Many of the outcomes people hoped ESG investing would produce depended on policy, regulation, and technological change that private capital could not deliver on its own. Sachs argues that frustration with banks and asset managers reflects a mismatch between objectives, mandates and instruments rather than simple inaction. The article notes that many large financial institutions pledged early in the decade to align portfolios with a 1.5C pathway, but that enthusiasm has waned amid stronger energy demand, shifting politics and market structures that did not support the expectations placed on private finance. Sachs’ central point is that the concept of “climate risk” has been used too loosely, conflating planetary risk, economic risk and financial risk. Physical climate hazards and economy-wide damage do not automatically translate into a financial risk that any one bank or investor can manage within its mandate, and when those categories are blurred, accountability becomes diffuse and incentives can become distorted. The critique is especially relevant for investors because it distinguishes disclosure, portfolio accounting and financed emissions targets from the real economy policies and technologies required to reduce emissions. Stress tests and risk models may identify vulnerabilities, but a bank’s rational response to elevated risk can be to reprice, shorten tenor or withdraw exposure, not necessarily to finance transition at the scale required. The critique does not dismiss sustainable finance but, rather, argues that the field needs greater precision about which institutions can influence which outcomes and where public policy, rather than private capital alone, must carry the burden.
