Investor Perspectives on Sustainable Markets: the next decade moves from accountability to action

A decade after sustainable finance entered the mainstream, the market is entering a new phase. Much of the groundwork has been laid through sustainability frameworks, disclosure standards and investor expectations. Increasingly, investor attention is shifting from sustainability commitments to implementation, with greater focus on how organisations will finance, execute and report on their transition plans, and whether those efforts can deliver measurable outcomes.

That was a key takeaway from ING's recent Investor Perspectives on Sustainable Markets webinar, which brought together investors, ratings specialists and sustainable finance practitioners to discuss where sustainable capital markets are heading next. While the first decade focused on transparency and accountability, the next will be defined by execution, resilience and impact.

Since the Paris Agreement in 2015, sustainable finance has grown rapidly, supported by the development of green bond frameworks, sustainability taxonomies and increasingly sophisticated disclosure standards. Sustainable finance has increasingly become part of mainstream investment and financing decisions.

However, investors are now looking beyond commitments and ambitions. Increasing attention is being placed on transition plans, capital expenditure strategies, governance structures and measurable outcomes. The question is no longer whether organisations have set climate targets, but how those targets will be achieved and financed.

Transparency remains a critical differentiator. Green, social and sustainability-labelled bonds continue to provide investors with enhanced visibility over the use of proceeds, governance mechanisms and sustainability outcomes. Investors also noted that disclosure is becoming more focused on materiality, with greater emphasis on information that helps assess long-term resilience, business strategy and transition readiness.

As sustainability reporting continues to mature, the market is increasingly viewing ESG considerations as a core component of investment and risk management rather than a standalone reporting exercise.

One of the strongest themes emerging from the discussion was the growing importance of transition finance, particularly in Asia.

The region is home to many hard-to-abate sectors that are essential to economic development yet face significant decarbonisation challenges. Industries such as steel, cement and heavy manufacturing require substantial capital investment and technological innovation to reduce emissions while remaining competitive.

Participants highlighted a growing shift among investors away from a simple "green versus brown" view of sustainable investing. Instead, there is increasing recognition that real-world decarbonisation will require financing credible transition pathways across sectors that are not yet fully green but are making measurable progress.

This is creating new opportunities for issuers that can demonstrate clear transition strategies, defined capital allocation plans and transparent reporting on progress. Investors are increasingly focused on understanding how businesses intend to move from ambition to implementation, and how those plans align with long-term commercial realities.

Regional developments are also helping to support this trend. Growing interest in transition taxonomies and locally relevant frameworks across Asia is helping create greater clarity around what constitutes credible transition activities and where capital can be most effectively deployed.

While climate mitigation remains central to the sustainability agenda, panellists also pointed to adaptation and resilience as increasingly important priorities for the years ahead.

Extreme weather events, pressure on water resources, infrastructure vulnerabilities and supply chain disruptions are making physical climate risks more visible across economies. As these risks become more financially material, investors are paying closer attention to how businesses and governments are preparing for a changing climate.

Water, biodiversity and climate resilience were identified as themes likely to attract greater attention from both investors and policymakers. At the same time, participants acknowledged that mobilising private capital into these areas remains challenging. Many resilience-related investments do not fit neatly into existing financing structures, creating opportunities for innovation across sustainable capital markets.

The discussion also highlighted the growing importance of supply chain resilience and adaptation planning as companies seek to strengthen their ability to manage future disruptions. Over time, resilience may become as important to investors as traditional climate mitigation efforts.

• Investors are increasingly focused on execution, capital allocation and measurable outcomes.
• Transition finance is becoming a defining sustainable investment opportunity across Asia.
• Adaptation, resilience, water and biodiversity are rising up the investor agenda.
• Transparency, governance and credible transition plans remain critical differentiators.

Sustainable finance is entering a more mature and pragmatic phase. Investors continue to show strong appetite for sustainable financing instruments, but expectations are evolving. Greater focus is being placed on credible transition plans, financial materiality, governance and measurable impact.

At the same time, new opportunities are emerging across transition finance, adaptation, resilience and sustainable infrastructure. As markets continue to evolve, organisations that can clearly demonstrate how capital is supporting their transition journey may be best positioned to attract investor interest.

The foundations of sustainable finance are firmly in place. The next challenge is putting capital to work at the scale and speed required to deliver meaningful outcomes in the real economy.

Society is transitioning to a low-carbon economy. So are our clients, and so is ING. We finance many sustainable activities, but we still finance more that’s not. See how we’re progressing on Opens in a new tabOpens in a new tabing.com/climate/

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