In years to come, 2025 may prove to have been a turning point for sustainable investing.
The year began with President Donald Trump withdrawing the US from the Paris Agreement, an action he swiftly followed by revoking environmental subsidies and regulations. In August, talks in Geneva failed to produce a global plastics treaty; and November’s COP30 was widely seen as disappointing, after no formal agreement was reached on phasing out fossil fuels and attempts to create a roadmap to end deforestation were dropped.
However, perhaps unexpectedly, these political headwinds have put sustainable investing onto a more stable footing. With investors and businesses no longer able to rely on government policy, 2025 was the year in which the Sustainability Revolution moved decisively from ideology to economic fundamentals.
Nowhere was this underlined more spectacularly than in China, which is rapidly evolving into the world’s first ‘electro-state’. By the end of H1 2025, China was on track to install twice as much solar photovoltaic capacity as the rest of the world combined – this vast expansion has helped the country’s emissions remain flat for the last 18 months, even as electricity demand has risen.1
Read also: Sustainability is being made in China
Where China led, many others followed. Around the world, grid-scale battery installations surged – a trend set to be supported by major US and EU investment to secure supplies of critical minerals and ‘energy metals’, including plans to boost rates of recovery, recycling, and reuse.2 (The transition is even gathering pace in Texas, where solar capacity passed coal capacity for the first time in 2025.3)
The shift from politics to economics has fundamentally altered the sustainable investment landscape. In 2026, we are convinced that the transition will accelerate, as sustainable technologies prove themselves cheaper, simpler, and functionally superior to incumbent technologies. We look at some of the top trends investors should watch in the year ahead.
1. The rise of modular clean technologies
The rise of ‘modularity’ – where clean technologies are designed as easily scalable, standalone modules – is giving sustainable solutions a competitive edge.
Solar photovoltaic panels and battery storage – which can be added in series whenever more power is needed – are upending traditional power models
This is most evident in the energy sector, where solar photovoltaic panels and battery storage – which can be added in series whenever more power is needed – are upending traditional power models. According to analytics firm Wood Mackenzie, solar photovoltaic cemented its place as the world’s cheapest form of energy in 2025, achieving a record low levelised cost of electricity (LCOE) of USD 37 per MWh in the Middle East and Africa. The firm anticipates that continued improvements in modular efficiency will drive further cost reductions.4
A similar deflationary effect is also set to become evident in our food systems. For many years, precision fermentation and cultivated proteins have held out the promise of providing meat alternatives sustainably and at scale. To date, those efforts have hit a cost barrier – simply put, lab-grown meat has been too expensive. Now that is set to change, thanks, in part, to modular bio-reactors which enable cheaper research and development and make it easier to achieve scale. Already, alternative proteins firms are achieving production costs well below industry forecasts5 – a trend set to accelerate as start-ups such as Sweden’s Curve focus on designing modular processes.
In agriculture, AI-powered drones are being deployed to monitor crop growth and detect early signs of disease or stress, minimising the need for pesticides and fertilisers
2. AI – a cross-cutting catalyst
Though we are still in the foothills of understanding what artificial intelligence can offer, the technology is already driving sustainability focussed innovations across multiple sectors.
In agriculture, for instance, AI-powered drones are being deployed to monitor crop growth and detect early signs of disease or stress, minimising the need for pesticides and fertilisers. Pesticide use is being cut further by solar-powered, autonomous weeding robots that use AI to identify weeds then pluck them from the ground, or even eliminate them with laser beams.6
In our materials systems, huge sums are being committed to using AI to design new, sustainable materials. Alphabet, Meta, NVIDIA, and IBM have all released AI models dedicated to the task – some start-ups have even built autonomous labs where AI-powered models and robots design, synthesise, and test new materials with minimal human input.7
And in energy, AI’s deployment in smart grids is expanding, to forecast electricity demand and supply, detect breakdowns in the grid, smooth the intermittency of renewables production, integrate decentralised energy, and reduce downtime through predictive maintenance.8
As electrification gathers pace, we are moving from volatile, fuel-linked energy costs – that are highly vulnerable to geopolitical shocks – to a world of predictable power
3. Predictable power
This rollout of smart grids and renewable electricity production is underpinning a long-term, structural shift in our energy systems. As electrification gathers pace, we are moving from volatile, fuel-linked energy costs – that are highly vulnerable to geopolitical shocks – to a world of predictable power.
For sectors where energy is a significant proportion of operational expenditure, this is set to re-write business models and reshape industrial competitiveness. Increasingly, energy-intensive industries will invest in plants and factories close to renewables hubs – many will even build their own. For example, tech firm Tesla’s ‘giga-factory’ in Nevada is powered entirely by renewable energy generated either on-site or nearby;9 in Australia, Rio Tinto is planning multiple large solar projects to power its mining activities.10
Predictable power will build macroeconomic resilience – it will also reshape the geopolitical landscape. Fossil fuel-rich countries will see their influence diminish, while regions with abundant renewable resources – such as the US Southwest, Australia, and parts of Southern Europe, Africa, and the Middle East – are set to discover that clean, renewable energy brings with it a decisive economic advantage.
More than two thirds of all agricultural land is used for livestock production. Alternative proteins, by contrast, can be produced using 90% less land – they can also cut water use by up to 99%
4. Freeing the land
More than two thirds of all agricultural land is used for livestock production, amounting to nearly 34 million km² – an area larger than Europe, the US, and China combined.11
Alternative proteins, by contrast, can be produced using 90% less land – they can also cut water use by up to 99%.12 Given animal agriculture’s outsized resource use, any significant shift to alternative proteins would unlock huge swathes of land, allowing entire ecosystems to be returned to nature. As modular bio-reactors bring down the costs of producing lab-grown meat and cultivated alternatives, this long-promised benefit is closer than ever.
Read also: Pink rice serves up alternative to carbon-intensive meat
More land is set to be unlocked in our cities, as the transition to AI-powered autonomous vehicles (AVs) frees up urban spaces. Though forecasts vary, it is widely believed that the adoption of AVs will lead to a reduction in private car ownership. As the car fleet falls, billions of square metres of on- and off-street parking spaces could be ‘re-greened’. For example, a World Economic Forum study found that Boston would likely see its parking needs halved following roll-out of AVs.13
AVs are also safer – after more than 120 million miles driven, Waymo, the US’s leading provider of driverless taxis, has registered a 90% lower rate of serious crashes,14 significantly reducing both harm to humans and the resources needed for car repairs or replacements.
Wearable health devices are increasingly being integrated into health systems, enabling intervention at the earliest opportunity
5. From sick-care to health-care
Though sustainability has come to be synonymous with tackling the climate challenge, building a truly sustainable global economy also means addressing economic inequalities. At the heart of this – is healthcare.
Medical costs in many developed nations have spiralled, putting public funds under pressure and reducing access to high-quality care. However, the sector is now undergoing a profound, structural shift.
It’s thought that one in eight Americans have tried, or are currently using, GLP-1 weight-loss drugs,15 a trend that is reshaping consumer behaviour on a massive scale. In the US, GLP-1 users have been found to spend 11% less on unhealthy, processed foods in the month after beginning their course of medication;16 in the UK, the boss of national bakery firm Greggs has said there is “no doubt” that GLP-1s have hit company profits.
Simultaneously, enhanced by AI’s ability to analyse large datasets and detect changes in patterns, wearable health devices are increasingly being integrated into health systems, enabling intervention at the earliest opportunity. AI is also revolutionising drug discovery by accelerating the R&D process, and rapidly bringing down the cost of genetic testing.
The result is a transition from ‘sick-care’ to accessible health-care, as we focus on maintaining good health for longer, and cut the cost of making early, personalised interventions.
Read also: Investing in global system changes
System changes drive sustainable investing
After years of policy and sustainability ‘virtue signalling’, the cold reality of economics has taken over. Deep, sustainable, innovation-led transitions are taking place across our energy, industrial, consumer, and health systems, with technology – and AI in particular – acting as a catalyst across all sectors and industries.
At the same time, the meaning of a “sustainable economy” is shifting. Sustainability is no longer merely a question of reducing emissions, nor a compliance exercise or a sacrifice of prosperity – it is about building a superior economic system that delivers lower costs, higher productivity, greater resilience, and improved outcomes for people and the planet.
Despite the political rhetoric, at Lombard Odier we believe 2026 will prove that the sustainability transition is continuing to unfold at unprecedented speed and scale, as we move towards a net zero, nature-positive, socially constructive, and digitally enabled economy.
