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North America did passably well in sustainable finance in 2024, but it didn’t feel that way—not at the end of the year, anyway.

Sustainable bond issuance volume totaled $124 billion in North America for 2024, 1% higher than the previous year, according to Moody’s Ratings. The US accounted for roughly 80% of issuance in the region.

However, in January 2025, the new administration of President Donald Trump pulled the US out of the Paris Agreement, which aims to reduce global greenhouse gas emissions and adapt to the adverse impacts of climate change.

Six prominent US banks, Citigroup, Goldman Sachs, Wells Fargo, Bank of America, JPMorgan Chase, and Morgan Stanley, exited the UN-convened Net-Zero Banking Alliance between Trump’s election and his inauguration.

“The backlash against ESG in some parts of the United States may have been one of the reasons behind the retreat of some North American financial institutions from net-zero alliances,” says Gregor Vulturius, lead scientist and senior adviser on climate and sustainable finance at Sweden’s SEB.

Moody’s Ratings expects sustainable bond issuance in North America to be “muted amid a retrenchment of climate policies” in the US over the next 12 months, given the new administration’s climate agenda—but issuance shouldn’t collapse. Corporate initiatives and state-level efforts could counteract diminished federal investment in clean energy in the US, according to the bond-ratings agency.

Bank Of America

Best Bank for Sustainable Finance

Best Impact Investing Solution

Bank of America (BofA) has supported sustainable finance in North America for most of the decade, and 2024 was no different. The giant US bank’s projects ranged from leading arranger and lender to a Linden, New Jersey, facility for converting organic wastes to natural gas; to financing for SunZia Transmission and SunZia Wind, which together constitute the largest clean-energy infrastructure project in US history, located in New Mexico and Arizona.

Along the way, BofA also made a $205 million impact investment to help jump-start the new marketplace for carbon capture tax credits in the US. While the credit was created originally in 2008, it was then expanded and extended by the 2022 US Inflation Reduction Act (IRA). The deal was with Harvestone Low Carbon Partners, which produces ethanol. That process generates carbon dioxide, which is then sequestered in an on-site injection well at Harvestone’s subsidiary Blue Flint’s North Dakota plant.

Harvestone’s carbon capture platform makes it eligible to sell carbon capture tax credits under the IRA, and in September 2024 BofA purchased $205 million of these. This was one of the most significant investments in carbon capture and the first deal of its kind since the passage of the IRA.

SMBC

Sustainable Finance Deal of the Year

Dow Chemical Company issued its inaugural green bonds to a total of $1.25 billion in February 2024 to fund its Path2Zero project in Fort Saskatchewan, Alberta, among other projects. Path2Zero is the start of what Dow hopes will become the world’s first net-zero Scope 1 and 2 emissions integrated ethylene “cracker” and derivates complex. Cracking is the process whereby complex organic molecules are broken down into simpler molecules such as light hydrocarbons.

It was also meant to show that a project with decarbonization and circularity goals can attract interest from a diverse investor base looking to support industrial transformations through sustainability investment. It is seen as a big step forward for the hard-to-abate chemicals sector.

Sumitomo Mitsui Banking Corporation (SMBC) was deeply engaged in developing and publishing Dow’s inaugural green finance framework in January 2024. The framework outlines Dow’s projects related to climate protection, the circular economy, and safer materials, including Path2Zero.

According to the London Stock Exchange Group (LSEG), SMBC was one of North America’s top lenders of sustainable loans in 2024. For example, SMBC structured and executed a green loan for Twelve, a startup company that develops sustainable aviation fuel. The funds will be used to design, develop, and construct a green fuel production facility in Moses Lake, Washington.

Scotiabank

Best Bank for Sustainable Infrastructure/Project Finance

Best Bank for Sustainable Financing in Emerging Markets

Best Bank for Social Bonds

Best Bank for Sustainable Bonds

Best Bank for Sustainability Transparency

Best Bank for Transition/Sustainability-Linked Loans

In March 2024, Canadian nuclear power operator Bruce Power issued a 600 million Canadian dollar (about $420 million) green bond. Scotiabank was joint bookrunner to the transaction, which was the bank’s first issuance under its updated Green Financing Framework—where nuclear energy is now a category for use of proceeds to aid in the decarbonization of the power sector.

In 2021, Bruce Power was the world’s first nuclear power operator to issue a green bond. Since then, it has issued 1.7 billion Canadian dollars in green bonds through three offerings.

While based in Canada, Scotia operates globally, including emerging markets. In Latin America, the bank is a leading bookrunner, with more than a 15% market share in sustainable bonds, according to Bloomberg. It often supports innovative projects. For example, in November 2024, Scotia was the joint bookrunner for Mexico’s first blue bond, to support sustainable fishing and aquaculture.

Elsewhere, Scotia has excelled in sustainability bonds, which have green and social features. In 2024, it issued 24 sustainability bonds with a volume of $28.2 billion, accounting for 7.5% of Scotia’s overall bond volume.

According to LSEG data, Scotia is also a top 15 (global) bookrunner in sustainable loans. In 2024, it was a co-sustainability structuring agent for Lundin Mining’s inaugural $2.55 billion sustainability-linked loan, with an interest rate tied to the mining company’s performance in environmental stewardship and local community engagement.

CIBC

Best Bank for Green Bonds

Best Bank for Sustaining Communities

CIBC advised the Government of Canada on its updated Green Bond Framework, which now includes nuclear power as an eligible use of proceeds. This was in effect for Canada’s second green bond issuance, for 4 billion Canadian dollars in February 2024, reopened for a follow-up 2 billion Canadian dollars in October.

The bank was also the joint bookrunner on several corporate and sovereign green and sustainable issuances within Canada in 2024, including the Province of Ontario’s 1.5 billion Canadian dollar green bond in March, and Ontario Power Generation’s $1 billion Canadian dollar green medium-term notes in June.

The bank is mindful about the communities it serves. In 2024, CIBC developed partnerships with six First Nations across Canada with total authorized lending of 34.5 million Canadian dollars for housing loans. CIBC Capital Markets also acted as joint bookrunner, co-lead arranger, and co-social coordinator in Exchange Income Corporation’s 200 million Canadian dollar social loan to finance aircraft purchase for medevac operations across British Columbia, including services for remote, rural, and Indigenous communities. Supporting communities extends to the US as well. In 2024, CIBC financed projects totaling $123 million, resulting in 500 units of affordable housing in low- and moderate-income communities across the US.

Latin America is rich in natural resources, making it a powerhouse for sustainability. About 620 million people live in the region, or about 7.7% of the world’s population. With an urbanization rate of over 80%, the transition to a more sustainable economy presents opportunities and challenges.

According to the International Energy Agency, Latin America’s share of renewable energy generation in 2023 was 60%, with hydropower alone accounting for 45% of the electricity supply. The region is expanding biofuel and clean energy production and is projected to be a key clean-hydrogen export zone by 2030, which will ultimately help unlock economic growth. Many Latin American banks have been integral to this process.

The region is the world’s largest net exporter and produces most of the world’s food, and agriculture accounts for a significant part of the Latin American economy. The region’s sustainable agriculture practices are becoming more critical as countries strive to cultivate a nutritious food supply for their populations despite climate change and supply chain disruptions.

Agriculture relies heavily on natural resources. Latin America contains a quarter of the world’s forests, a third of its fresh water, and around 60% of global terrestrial life, plus diverse freshwater and marine species. Maintaining these natural resources is a priority. Deforestation, for example, disrupts water supplies and leads to soil erosion. Higher temperatures and unpredictable weather patterns make growing certain crops and producing livestock difficult. Many banks address these challenges through their ESG frameworks and policies and their sustainable products and services.

BTG Pactual

Best Bank for Sustainable Finance

Sustainable Finance Deal of the Year

Best Impact Investing Solution

Circular Economy Commitment Award

Best Bank for Sustaining Communities

BTG Pactual has driven growth through its commitment to sustainable practices and transition to a low-carbon economy. Of the bank’s many initiatives and projects, we recognize its work on the Águas do Rio SPT “Saneamento para Todos” (sanitation for all) transaction as our Sustainable Finance Deal of the Year. This transaction privatized the water and sewage services provided by the Companhia Estadual de Águas e Esgotos via an auction won by the Águas do Brasil Consortium in April 2021. Águas do Rio is Brazil’s largest investment in basic sanitation and provides services to about 10 million people with more than 37 billion Brazilian reais (about $6.5 billion) in socioeconomic benefits. This year marked the fourth issuance and concluded the project’s financing with an estimated capital expenditure of 24.4 billion reais and a grant of 15.4 billion reais.

The bank was lead bookrunner and financial adviser for the Barueri Energia Renovável green bond issuance that financed the first waste-to-energy project in Brazil. This plant will process about 870 tons of trash daily by combusting municipal solid waste or organic matter and using the resulting steam to heat a boiler and generate electricity. The plant will have an installed capacity of 20 MW. This issuance was a significant milestone in waste management and renewable energy in Latin America, transforming urban waste into sustainable energy that serves an urban population and contributes to the circular economy.

Scotiabank

Best Bank for Sustainable Infrastructure/Project Finance

Best Bank for Sustainability Transparency

Scotiabank provides its clients and their communities with services focused on delivering sustainable growth and maximizing shareholder value. The bank’s specialized investment products and resources are geared toward clients interested in sustainable or responsible investing.

The bank is one of the region’s top bookrunners for green, social, and sustainability bonds, the proceeds of which have financed many large infrastructure projects throughout Latin America. The bank was the global coordinator, joint bookrunner and deal manager for a $500 million green bond for the Chilean utility company AES Andes, its first green bond in four years. This is the first deal under the updated framework that addresses energy storage, green hydrogen production, infrastructure, and charging stations.

Renewable energy producer Grenergy’s biggest financing to date was the $344 million green loan used to finance the construction and development of two phases of the Oasis de Atacama project, the world’s largest renewable energy storage project. Scotiabank held various roles in this transaction, including that of a lender. Scotiabank was also the bookrunner, lead arranger, and green loan coordinator for this syndicated loan, the first for a hybrid battery energy storage system project of this scale. This $1.4 billion project is intended to support sustainable power for 145,000 homes and reduce annual CO2 emissions by 146,000 metric tons.

Itaú BBA

Best Bank for Sustainable Financing in Emerging Markets

Best Bank for ESG-Related Loans

Best Bank for Transition/Sustainability-Linked Loans

Itaú BBA’s commitment to sustainable development is reflected in a strategy incorporating environmental, social, and climate initiatives. The bank’s sustainable development involves financing positive impact sectors, structuring ESG operations, and providing ESG products. Itaú met its 2021 commitment of 400 billion reais by 2025 through sustainable business initiatives, with Itaú BBA responsible for 84%, or 353 billion reais. Itaú’s new objective is to add 600 billion reais to this goal and mobilize 1 trillion reais in sustainable finance by December 2030.

The bank advised Vibra Energia, Latin America’s largest distributor and marketer of petroleum derivatives and biofuels, on decarbonization and climate transition through a 1.5 billion real green and transition bond. The bank also supported sustainable construction initiatives through its Green Entrepreneur Plan, which provides financing to residential and commercial projects in Brazil that leverage sustainable building techniques and resources.

Agriculture generates about 26% of Brazil’s greenhouse gas emissions. This requires balancing economic growth and food production with sustainability. Citrosuco is a global orange juice producer that has embraced many sustainable practices on its farms and a robust decarbonization plan. The bank structured a sustainability-linked loan that aligns key targets with Citrosuco’s corporate strategy to lead the value chain with an 82% sustainable fruit supply by engaging more third-party producers and reducing CO2 emissions related to industrial practices and operational efficiency.

Bradesco BBI

Best Bank for Green Bonds

Best Bank for Social Bonds

Best Bank for Sustainable Bonds

Bradesco BBI has already achieved its goal of mobilizing 250 billion reais in sustainable finance by 2025 and has increased that goal to 320 billion reais over the same period. The bank is the first in Brazil to target net-zero carbon emissions by 2050.

The bank has structured many bonds that focus on sustainability. It was actively involved in structuring green bonds for one of the world’s largest energy companies, Raízen. The proceeds from these bonds fund projects for renewable energy, such as sugarcane ethanol biofuel and biomass cogeneration, energy efficiency, and clean transportation.

Bradesco was the bookrunner and ESG coordinator of 200 million reais in social bonds issued by Mottu, a Brazilian motorcycle rental company and last-mile delivery marketplace. Mottu targets low-income and minority populations within Brazil.

Órigo Energia is a renewable energy company with over 100 solar farms in Brazil. The bank helped Órigo Energia to issue 600 million reais of commercial notes. These proceeds will be used to build photovoltaic distributed energy generation plants. The bank was also the lead and ESG coordinator for Scala Data Centers’ approximately 1.4 billion reais of green debenture. Scala Data Center is a hyperscale sustainable data center platform, and the issuance proceeds will be used for energy efficiency projects, renewable energy, and green buildings.

India’s Shapoorji Pallonji (SP) Group, a construction and real estate conglomerate, is negotiating with global private credit funds to raise $3.3 billion, marking the country’s largest local currency private debt deal. The funds will be used to refinance existing debt.

The group is controlled by billionaire Shapoor Pallonji Mistry, whose family ranks as the 13th richest in India, according to Forbes.

The group’s debt hit $5.2 billion in March 2020 due to high construction costs and working capital shortages during the pandemic. It utilized a one-time resolution (OTR) from the Reserve Bank of India, repaid $1.4 billion to lenders, and exited the plan by March 2022, becoming the largest and first fully repaid OTR in the country within a year.

Further, the group sold its assets, including Eureka Forbes, Gopalpur Port, and Dharamtar Port. The company’s debt decreased to $2.2 billion on March 31, 2024.

However, the maturing debt of $3.8 billion between March 2025 and April 2026 is a problem.

In 2021, Sterling Investments, linked to SP Group promoters, raised $2.2 billion from Ares SSG, a capital market company, and Farallon Capital Management LLC, pledging a 9.1% stake in Tata Sons and real estate assets, maturing in March 2025.

In June 2023, Cyrus Investments, a subsidiary of SP Group’s promoter entity Goswami Infratech, raised $1.6 billion at an interest rate of 18.75% against a 9.18% stake in Tata Sons as collateral, which will mature in April 2026.

The group is negotiating with several investors, including Cerberus Capital Management, Davidson Kempner Capital Management, Varde Partners, Farallon Capital Management, Ares Management, and EAAA India Alternatives, to refinance its debt. Deutsche Bank is the sole arranger for the deal.

The SP deal would deepen India’s private credit industry, which is expanding as the Budget 2025-2026 allocates $129 billion for the infrastructure sector and encourages private sector participation.

Indian corporations raised $6.77 billion in private credit deals in 2024. In 2025, the market anticipates key deals, including the second $500 million tranche for Reliance Capital by the Hinduja Group and the $212 million fundraising by TVS Mobility Group.

It used to be tough investing in private market assets. Typically, at least a couple of hundred thousand dollars was required, and you had to commit the money for up to 10 years or more. You had to be an accredited investor (sophisticated and experienced), and you had to be ready to fork over more capital in the future depending on the terms.

Not anymore. The development of open-ended, “evergreen” funds that allow investors to periodically redeem shares—typically, monthly or quarterly—and carry relatively low investment minimums have made private market investing accessible to just about everyone. The new funds’ investing strategies run the gamut. Some focus on specific sectors of the market while others are more diversified.

“Anyone can get exposure to private investments now,” says William Whitt, analyst with Datos Insights. “New fund structures are generating a lot of interest with retail investors.”

Evergreen funds are intended to attract investors further down the wealth spectrum from the traditional buyers of private equity and debt stakes. High-net-worth (HNW) investors, with more than $1 million in liquid assets, and the mass affluent, with less than $1 million, have virtually no holdings in private markets. En masse, they represent a huge new source of potential capital for private equity and debt managers to tap. A survey of alternative fund managers by Ernst & Young last year found that accessing private client capital was the top strategic priority for managers.

The number of funds being floated, largely by the biggest financial sponsors like Blackstone, KKR, and Apollo, is growing rapidly. According to FS Investments and Prequin data, more than 500 evergreen funds held over $400 billion in assets in 2023. Last October, KKR and mutual fund giant Capital Group filed to launch two hybrid fixed-income funds investing in public and private debt.

The filings underscore an effort to make private markets more accessible to a broader client base, the firms touted in a press release.

“The product structures are much more client-friendly and they’re bringing a lot more investors to the table,” says Mark Sutterlin, head of alternative investments at Bank of America and Merrill Lynch. “You need discipline to put together a diversified portfolio, but advisors can implement a plan in a more turnkey manner now.”

The development of the secondary market in private investments has also opened up opportunities for new buyers in the private space. Secondaries are existing stakes in private asset funds that are sold to other investors. The buyer gets into the fund later in the investment lifecycle but is still obligated to meet any further contracted capital calls from the general partner.

Some secondaries are simply the stakes of existing limited partners in the fund while others are transactions led by the general partner. The GP can use the money either to continue holding assets in the fund or to cash out existing investors. In some cases, investors can get discounts on secondary offerings, which will have a shorter time horizon than primary fund investments.

“Secondaries can be a good way to start an allocation,” says Trish Halper, CIO in the family office practice at Northern Trust. “They’re further along in the investment cycle and investors can get distributions quicker.”

Alternatives research firm Preqin is forecasting that secondaries will be the fastest growing segment of the alternatives market over the next five years.

The proliferation of new fund structures and the development of the secondaries market is bringing new investors to the private asset markets. Some close observers, however, are skeptical of this “democratization” of the market. “It feels like the latest fad,” Whitt says. “Everyone is running after it because everyone else is without really thinking about why.”     

Investors are eager to spend trillions on energy transition, but too much money is piling into mature projects, while high-risk innovations struggle to attract backing.     

Will there be enough money in the world to save the planet? The answer to this urgent question is not straightforward.

Big-picture prognosticators name staggering sums needed to finance a greener future—and equally daunting shortfalls in securing them. Investment in the energy transition must more than double to $4.5 trillion annually to reach internationally agreed 2030 emissions targets, according to European financier Allianz. The US-based Boston Consulting Group (BCG) estimates an $18 trillion net-zero “capital gap,” in a late 2023 report.

The outlook for 2025 appears even more challenging. US President Donald Trump has reclaimed the office, vowing to dismantle the generous green subsidies his predecessor, former President Joe Biden, had advanced through the Inflation Reduction Act (IRA)—and to “drill, baby, drill” for oil and gas. High energy costs and farmer protests are eroding support for Europe’s ambitious transition agenda, while Canada is poised to roll back its precedent-setting carbon tax.

In financial markets, stubbornly high interest rates are keeping the cost of capital-intensive energy infrastructure elevated for longer. Meanwhile, a surge in data center construction, driven by AI, is supercharging electricity-demand projections—prompting a return to fossil fuel dependency. “One of these data centers can take as much power as a small city,” says Richard de los Reyes, a portfolio manager at T. Rowe Price’s New Era Fund. “There’s an increasing recognition that a lot of that will have to come from natural gas.”

Green Investing’s Mismatched Realities

The view is quite different, though, in the financial trenches, among practitioners who are raising capital and structuring deals. They worry about too much capital chasing too few green investments. “I’m still a true believer that the megatrends of decarbonization and digitalization will transform the way we live,” says Alex Leung, head of infrastructure research and strategy at UBS Asset Management. “But [these sectors] are getting to be crowded trades.”

How can both be true? The renewable energy universe is increasingly divided from a financial perspective. There is no shortage of capital, but much of it is concentrated in a few mature green technologies, while more-innovative or unproven sectors struggle to attract funding.

On one side are established, cost-effective technologies that investors can back with a reasonable expectation of a steady, decades-long payout. Solar and onshore wind power have moved into this category, as economies of scale and an equipment boom in China have driven the costs of these energy sources below fossil fuels.

On the other side are technologies that show promise but not yet profit, such as carbon capture or green hydrogen; or those with uncertain risks and high costs, like offshore wind. These projects still rely on deep-pocketed corporate backers or government support to reach commercial viability.

“Everyone wants to be part of the energy transition on paper,” says Antoine Saint Olive, global head of infrastructure and energy finance at Natixis Capital and Investment Banking in Paris. “But when you have a real deal on your desk, in many cases you are talking about new technologies.”

This mismatch—between an abundance of capital for well-established projects and an undersupply for higher-risk innovations—helps explain why trillions are still needed, even as investors complain of crowded trades.

Perhaps the most critical deals are in a border zone between proven and new technologies: in fast-developing storage systems for solar and wind power, and in adjustments to grids needed to transmit it. Renewable-generation investments will eventually hit a wall without upgraded delivery to the customer, and in some places they may have already.

As a rule of thumb, existing grids can cope until renewables reach 15% of their input, says Rebecca Fitz, a BCG partner and founding member of the firm’s Center for Energy Impact. Some parts of Europe are above 50%, creating “a bottleneck in power market design,” she says.

Europe’s patchwork of national grids and regulators poses special challenges to moving green energy from where it’s best produced—Spain and Portugal for solar, the Netherlands for wind—to where it’s needed, adds Stef Beusmans, an associate partner at Sustainable Capital Group in Amsterdam. “Different national support schemes make it harder for Europe to really fast-track deployment of clean energy,” he says.

Energy Transition Financing At A Crossroads

The enormous scope and complexity of the energy transition present both challenges and opportunities to the venerable, low-profile world of infrastructure finance, which absorbs about 4% of global capital, according to UBS. Plain vanilla deals are rare in this area. Bond underwriters and traders have rating agencies to guide them and liquid markets to distribute risk, but infrastructure investors must structure transactions individually and often hold the risk for the long haul. “Structuring and closing a deal could take up to a year,” Leung says. “Many infrastructure assets require active management after that. This isn’t just clipping a coupon.”

Green investments make the game only harder, says Marta Perez, head of the Americas infrastructure debt team at Allianz Capital Partners. “Traditional project finance models, which were designed around more-predictable long-term assets like fossil fuel power plants, need to evolve for the variable, often decentralized nature of renewable energy systems,” she explains.

Climate activists focus on a range of priorities: planting trees, insulating buildings, and more. For investors, however, the primary concern is electricity. BCG estimates that electric vehicles and other “end uses” of electricity account for 90% of the $18 trillion net-zero capital gap. “Electrified transport” and renewable-energy generation sucked up more than $600 billion each globally in 2023, according to Allianz. Power grid upgrades ran a distant third at $310 billion, and batteries and other energy-related components fourth at $135 billion.

The rush to build AI data centers—massive energy consumers—will drive those numbers only higher. UBS projects US electricity generation to grow by a staggering 20% annually from 2023-2026. The AI craze will be “slightly negative for decarbonization in the short term,” by demanding more power from fossil fuels, says Leung. However, AI also pulls the world’s biggest tech firms deeper into the energy transition. Despite recent fence-mending with Trump, Amazon, Alphabet (Google’s parent), Microsoft, and other hyperscalers that operate data centers remain “among the most committed to net-zero,” Leung says. “They may pay a premium for clean electricity.”

BCG’s Fitz points to a subtler trend: The AI-driven power surge is increasing the role of regulated utilities that can pass costs on through rate increases. That could provide one of the safest funding mechanisms for energy-transition investments. However, public resistance to higher bills—especially to fund Big Tech’s energy appetite—could become a major obstacle. BCG expects North American utilities to rely on renewables for 60% of the upcoming power demand increases, with natural gas supplying the other 35%.

One threat that infrastructure pros view as possibly overrated is Trump. The sheer duration of energy investments—far exceeding a single presidential term—makes policy swings less impactful. UBS research predicts that Trump will also struggle to repeal or gut the IRA. Roughly 70% of US renewable projects under development are in “red” states, which voted for Trump, Leung and his colleagues note. Eighteen Republicans in the House of Representatives already signed a letter opposing repeal, more than enough to be decisive in the narrowly divided chamber. But the impact of this resistance is hard to accurately measure, as Trump has been routinely bypassing Congress.

Texas, firmly in the Republican camp politically, nonetheless leads the US in wind and solar power. Nationwide, more than 70% of Americans support more wind and solar energy, according to Pew Research. UBS’ base-case scenario is that Trump will tweak the IRA rather than dismantle it, allowing Republican-led states to complete near-term renewable projects while still giving the president a political victory.

China Dominates Green Investing

The US, the world’s biggest economy, is not the leader in green investment. That distinction belongs to China, which last year sunk $818 billion into clean energy—more than the US, EU, and United Kingdom combined—according to CarbonCredits.com. Solar capacity in the People’s Republic jumped by 45.2% in 2024. China is also miles ahead in plans for nuclear power, which could be making a comeback in the US, too, if not Europe. Nuclear power emits no carbon, though it brings other well-known risks.

China’s leap forward in renewables is largely financed domestically, so global private capital looks elsewhere. Europe remains committed to a renewables surge to partly replace Russian natural gas imports, which Russian President Vladimir Putin cut off in response to Ukraine-related sanctions. The EU is also betting on more liquefied natural gas, but is still investing 10 times as much in renewables as in fossil fuels, the European Investment Bank (EIB) reports. The bloc’s total energy-transition investment jumped by one-third in 2023 to $360 billion and is expected to keep rising to meet 2030 carbon-reduction targets.

Other nations are also stepping up. India’s renewable capacity surged to nearly half the US level last year, with plans to triple by 2030. Six major solar developers in India have “successfully attracted investments from diverse sources, including foreign institutional investors from North America, Europe, and the Middle East,” S&P Global reports.

Brazil added a record 10.9 GW of power capacity last year, nearly 85% of it from renewables. Saudi Arabia is supporting the world’s largest and most ambitious green hydrogen project, near Neom, the kingdom’s “city of the future,” with $8.4 billion in promised investment, according to Neom. The goal is to split water molecules into their oxygen and hydrogen components using electric current produced from renewable sources, then store the hydrogen as a fuel source. Hot on their heels is the Saudis’ neighbor, the United Arab Emirates, leveraging its abundant sunshine for large-scale renewables projects.

Green Energy Has Plenty Of Investors

Capital for renewable energy is not drying up either. As populations age across the developed world and pension assets grow, managers look harder for investments that can match their long-term liabilities, Leung says. Funds in Australia and Canada, whose pension pools punch above their macroeconomic weight, are shifting up to 20% of their portfolios into infrastructure, he adds.

Environmental, social, and governance (ESG) principles continue to motivate big-ticket investors globally, Natixis’ Saint Olive points out. Banks, which provide at least as much infrastructure funding as institutional investors, still want to “greenify their balance sheets.” At least, banks outside the US do. “Banks and sponsors in the rest of the world still have ESG ambitions,” Saint Olive says. “That’s not going to collapse because there is a new president in one country.”

Private equity investments in green energy are also growing, from next to nothing before the pandemic to $26 billion globally by 2023, according to the EIB. Given the private equity model of leveraging up equity holdings, the money at work could be several times that figure.

Private equity players in the US are particularly focused on onshore wind generation, as solar becomes trendier and Texas officials push legislation that advantages fossil fuels, says BCG’s Fitz. “Private equity is paying a premium for wind assets,” she explains. “They view wind as a critical part of the energy picture going forward.”

Funding the global energy transition remains a monumental challenge. The US interstate highway system—one of the great infrastructure projects of the 20th century—cost $129 billion ($389 billion adjusted for inflation) when completed in 1991, according to the US Department of Transportation. That is a small slice of just one year’s capital needs for green power. The US highway system used proven technology and relied on the federal budget.

“Renewables require not just infrastructure, but also a complete rethinking of how energy is produced, stored, and distributed,” as Allianz’s Perez puts it. Governments, strained by 21st century social commitments, want to offload as much cost as possible to the private sector, China partially excepted.

Most renewable-transition estimates exclude the enormous investment required in mining the metals that will build batteries, grids, and turbines, Saint Olive notes. Mining is a “fully merchant business” too dependent on fluctuating prices to offer fixed, infrastructure-style returns; and it earns investors no green points for regulatory or public relations purposes, he adds. “Many banks don’t see the mining business positively from an ESG perspective,” he says. “They would rather let others finance it.”

Energy-Transition Train Is Already Moving

All the same, the global energy transition is not only continuing but accelerating, whatever the rhetoric coming from the White House. Infrastructure investors need to be part of the “complete rethinking” of a lower-carbon future. “The good-ol’ fully contracted project is getting harder to find,” Saint Olive observes.

But infrastructure investors are also used to designing bespoke solutions for a changing project landscape. “The beautiful part of our profession is that for the same asset you can have 20 different finance structures,” Saint Olive says. “In the US, you may have bank loans for construction, then turn to capital markets. European plants could rely on a 10-year power-purchase agreement. In the Middle East, you can get very long-term financing: construction plus 25 years.”

The critical question isn’t whether the transition will happen—but whether it will happen fast enough to avert ecological catastrophe. Private finance looks set to do its part, if engineers and governments can combine to deliver viable investments. “If projects are generating 20% returns, more capital will come in,” UBS’ Leung states. “Economic viability is a big part of the equation, but not always part of the discussion.”

Wealthy investors are expected to look beyond stocks and bonds, prompting private banks to expand offerings and expertise.

Publicly traded stocks and bonds have been great investments over the last 15 years, but wealthy investors are increasingly looking for alternatives to what the public securities markets offer them.

Whether from fear that public stocks are overvalued, that inflation will rise again, or that market volatility will increase going forward, wealthy investors want a change from the traditional.

Private banks are gearing up to help provide alternatives.

“Historically, [private investors] have been under-allocated to alternative assets compared to institutional investors, but we’re seeing a strong rise in demand,” says Mark Sutterlin, head of alternative investments at Bank of America Private Bank and Merrill Lynch. “We think most of our clients would be better off with an alternatives allocation around 25%.”

That would represent a huge shift in investing behavior for high-net-worth (HNW) investors. According to a 2023 report from consulting firm Bain & Co, ultra-high-net-worth investors and family offices with more than $30 million in assets already have 22% of their wealth invested in alternatives. But those with $5 million to $30 million in assets allocate only an average 3% to alternatives and those with $1 million to $5 million just 0.7%.

With individual investors and family offices holding more than half of the $289 trillion in global assets under management, that represents a huge, largely untapped pool of capital for alternative asset managers. It also represents a major challenge for private bankers aiming to help their HNW clients navigate new investment markets.

Preqin, an alternatives research firm, is forecasting that alternative assets under management—including private equity and credit, venture capital, hedge funds, real estate, and infrastructure investments—will rise from $16.8 trillion at the end of 2023 to $29.22 trillion by the end of 2029. Increased fundraising from private banks, family offices, and individual investors is expected to fuel the growth.

While Preqin is forecasting growth in all segments of the alternatives market—including hedge funds, which suffered an abysmal 2022 when both stocks and bonds took double digit losses—private equity and credit are the hottest markets.

“There’s been a tremendous amount of interest in private equity and private credit all along the wealth spectrum,” says William Whitt, analyst with Datos Insights who focuses on wealth management. “I expect the strong demand will likely last a couple more years as long as the economy stays healthy.”

Kinder, Gentler Offerings

Fueling the demand are kinder, gentler investment offerings from private asset managers.

“The preeminent sponsors recognize the opportunity and have become better partners with investors,” says Sutterlin. Large firms like Blackstone Group, KKR & Co, and Apollo Global Management have launched funds with smaller investment minimums, lower fees, greater transparency and even a degree of liquidity (see sidebar). “Investors are getting better access to the best strategies on better terms. Everything is changing in favor of end investors.”

Some banks are launching separate entities to help shepherd investors into private markets. Deutsche Bank launched DB Investment Partners just over a year ago to give institutional and HNW investors access to private credit investments. With floating interest rates, these vehicles have been in high demand for the last several years. DB Investment Partners operates independently and Deutsche is retaining its existing private credit business.

While the demand for alternatives is most developed in North America and Europe, Asia too is trending alternative.

“We’re seeing much more demand from our clients across the spectrum of alternative assets,” says Chee Jiun Wen, head of alternative investments at Bank of Singapore. “It’s not just about reducing risks but generating alpha and accessing opportunities you can’t get in the public markets.”

The bank, formerly known as ING Asia Private Bank, has been hiring people with institutional backgrounds and experience in alternatives markets. Its roughly 500 relationship managers get in-house training on alternative asset classes and how to incorporate them into client portfolios.

“We’ve been able to expand the investment universe for our clients and provide access to more investment solutions and investing strategies,” says Chee.

The bank is doing the same for its financial intermediary clients. Last year it launched a digital platform in partnership with global fintech firm iCapital that provides independent asset managers (IAMs) with access to over 1,600 funds from 600-plus firms. The site also offers research and tools for due diligence and reports and performance updates on fund investments.

“We’re a first mover in this space in Asia,” says Chee. “We’re giving IAMs the power to pick and choose the managers and investing strategies that make sense for their clients.”

A Key Differentiator

For private banks, helping wealthy clients increase their exposure to alternative assets smoothly and successfully will be a key differentiator in the wealth management industry going forward. While most have experience investing in alternatives for their wealthiest clients, the scale of the expected shift into alternatives in the HNW client space will be a major challenge for firms.

“There is a huge opportunity in private wealth, but banks need to be prepared for the growth,” says Trish Halper, CIO in the family office practice at Northern Trust. Halper’s clients have been investing in alternatives for decades with average allocations between 30% and 50%. “Family offices were early adopters in the alternatives space and high-net-worth investors are now catching up.”

The workload for financial advisors is significantly heavier with private market assets than with publicly traded stocks and bonds.

“The dispersion of returns is much wider in private markets than in public markets, which makes manager selection really important,” says Halper. “Banks need to devote enough resources for strong due diligence because access to information and data is much less in the private markets.”

The sourcing of quality investments is just the beginning. Private asset portfolios need to be diversified across sectors, vintages, and financial sponsors to reduce risk; the investments and the asset managers themselves need to be monitored; capital call obligations must be executed; and distributions need to be managed when investments mature.

“There are a lot more operational and administrative tasks involved in private investments,” Halper notes.

The growth in alternative asset markets represents a major shift in the private banking landscape. Banks across global markets are investing in technology and talent to handle the transition and to ensure that alternatives allocations help to optimize clients’ portfolios and meet their financial goals.

“The capital markets have evolved,” argues Bank of America’s Sutterlin. “For investors who want a truly diversified portfolio, if they’re not invested in private markets in both equities and fixed income, they’re not in a big part of the capital markets now.”

Global Finance: Can you briefly describe what your model does?

Joanne Horton: Yes. We’ve got what we think is a rather exciting model, which we describe in a working paper, that helps forecast in advance the likelihood that a firm will go on to commit accounting fraud.

What’s the likelihood that fraud will take place in the future? There’s lots of motivation, obviously, because a lot of fraud takes place: few cases, but each one is very expensive. In a recent interview, the US Securities and Exchange Commission’s (SEC) enforcement director said they had a record $600 million in penalties in 2024 just for 70 cases. So obviously, the penalties and deterrence for doing it are not doing their role, and we need to find something else that can hopefully prevent this from happening.

But most—well, all—of the research into accounting fraud has focused on detection rather than prevention. We wanted to examine prevention. So, what can we do before the fraud occurs? Can the board of directors, the auditors, or other gatekeepers do something? Can I identify the year the fraud occurred in the account? That’s what all the models currently do.

We’re trying to look at data well before the fraud took place and say, “Would we have red-flagged this firm as likely to be committing fraud in the future?” Our model will not tell you it will happen—it simply says there’s a high risk of it happening in the future, which allows us, hopefully, to take corrective action so the fraud doesn’t take place. We don’t include the fraud at all in our model, so we can accurately identify those who are likely to commit fraud and those who are unlikely to commit fraud at 87.68% of cases on average: 90.58% one year before the fraud takes place, 83% two years, and 75% three years before the fraud takes place.

GF: What does your model tell you about how accounting fraud happens?

Horton: We know the antecedents to fraud: It is never a cliff edge but always a slippery slope. You start off small, and then it starts escalating. If we think about it, a manager—if facing pressure to beat an analyst forecast, or beat last year’s earnings, or wanting a particular bonus—has enough flexibility in the accounting rules to manage those numbers while staying within the rules. So, they change inventory methodology, or they change their assumptions on revenue recognition, and they make it such that they beat these forecasts.

But eventually, they’ll hit the limit, and then the only thing they can do is either come clean or go on to egregious misreporting. Now, we know from the academic literature that three years before the fraud, they tend to beat earnings benchmarks. And there’s a recent paper that says you’re more likely to round up your earnings-per-share number about five years before. However, the problem with this research is that they already know the fraud has taken place.

So, how are we going to track the slippery slope? Ultimately, what the managers are doing is increasing their human intervention in the accounts—legitimately, within the rules, but then that human intervention has to keep escalating because with accruals reversals, you’ve got to cover the reversal, and then you’ve got to increase the amount to beat any forecast. So, human intervention in the accounts escalates.

GF: So how do you capture that human intervention—that higher risk of fraud?

Horton: We use Benford’s law, which is a mathematical frequency model. And what we know from prior literature is that the data in the financial statements and notes will follow Benford’s law on average—if there is no human intervention in the accounts. Now, some human intervention may be legitimate, so it will change the deviation, and some may be illegitimate. So, we have to infer whether the deviations are legitimate or not, and we do that by seeing whether the deviations increase and escalate over time. That shows the slippery slope.

Even if there are small but consecutive increases in deviation, they’re having to use human intervention to cover it up; and it’s still increasing relative to what the firm should look like.

The key benefit of Benford’s law is that it doesn’t matter what kind of firm it is—public, private, what accounting policies it follows, what currency it operates in, whether it’s loss-making, whether it’s a growth company, highly leveraged or no leverage at all—makes absolutely no difference. This enables this model to be universal because you can apply it to any company, country, or industry. Once we’ve got a probability from the model, we use that to determine a red flag. And we have to have a red flag twice, so we don’t have anything that’s just random.

GF: What does it take to get that first red flag?

Horton: If they say they made a legitimate change in depreciation, you’ll see an increase in human intervention, but then the deviation shouldn’t escalate.

The model learns from prior fraud as to what it takes: when it gets to a point where, in other cases, there is a higher likelihood. The model creates this hazard ratio, which tells us the likelihood, and then we compare that to what we’d expect in the overall population. If it’s higher than we’d expect in the population, then it’s red-flagged.

GF: And when does the company get a second red flag?

Horton: So what we’ve actually found out, which is interesting, is that it’s very rare—almost impossible—to stop being red-flagged. The model keeps red-flagging you, and then you either go bankrupt or commit fraud. What we haven’t been able to observe is a firm with a red flag that then suddenly stops.

In firms that commit fraud, there’s a culture where you can be overly optimistic about things and rationalize what you’ve done prior. This is why auditors are hopeless at capturing and identifying fraud: because it’s so incremental. The problem for auditors is that if they agree to one change, it’s quite difficult not to agree to a second change, because you’ve rationalized the agreement on the first change.

GF: How do you know to look for fraud in M&A?

Horton: There’s fraud in a lot of places; and the more opaque, the more fraud. You can hide it more easily in M&A, but it’s more about due diligence. So, you are acquiring another company; and we all know that if it’s a hostile takeover, the company is going to make itself look very expensive. So, more human intervention is needed in accounting. And you see that happening over time. And even if it’s not hostile, you’re going to make yourself look good for a takeover.

The other thing we notice is where most of the fraud takes place. It’s not in the parent company, it’s in the subsidiaries. They’re not under the purview of the top brass. They may have different auditors. The parent may be putting a lot of requirements on their subsidiaries to provide a huge return, and if they can’t do it, how do you alleviate the pressure? You manage your numbers.

GF: Do you have an example?

Horton: Here’s one. HP was under pressure to achieve high revenue targets. Their initial response was to increase their human intervention in 2008: They changed their inventory valuation assumption, their revenue recognition assumptions, and a few other things. But in the end, they couldn’t maintain that. So, they ended up, in 2015 and 2016, creating fictitious revenues, valuing the inventory upward, channel stuffing, and many other things. The SEC announced in 2020 that HP had committed fraud. Our model identified the fraud, and we red-flagged HP in the fourth quarter of 2010. So, we already knew at the end of 2010 that they were likely to commit fraud.

A more recent one is [fitness-beverage maker] Celsius. They committed accounting fraud in the second and third quarters of 2021; it was announced in 2025. We red-flagged it in the fourth quarter of 2019.

GF: How are you making your model available?

Horton: We have been offered quite a lot of money to buy the model. But being an academic, I think research is a social good; and therefore, we would just like to build up the model so it’s global and then provide the output to anybody who wants it. So, we would like to allow anyone to download our red flags. The other thing is that we will publish it in detail so our model will be perfectly replicable.

The other thing we’ve noticed in our analysis is that identifying escalating human intervention also exponentially improves bankruptcy risk models, because what do you do before you go bankrupt? You try to delay it, and you will do that through the accounting. So, we think this human intervention measure should be utilized in IPOs and M&As when you’re doing due diligence—all that sort of thing. In that respect, I want it to be a public good.

GF: Would it be possible for fraudsters to use AI to fly under the radar of Benford’s law?

Horton: That is very difficult, because human intervention is human intervention in whatever form it takes. We actually tried to use AI to create a set of accounts that had a huge level of human intervention but followed Benford’s law, and it was practically impossible. Because the trouble is, if you change a few numbers in revenue, it’s going to change a lot of numbers in accounting. It’s going to change your equity, your retained earnings, your profits, your earnings per share, your EBIT, your EBITDA—all these numbers would change. And it’s incredibly difficult. I’m sure someone could spend a lot of time trying to do it, but doing it quarter on quarter on quarter, we believe, is incredibly difficult, because we’ve tried it. But nothing’s impossible.

GF: Who do you foresee using the model besides academics?

Horton: I think auditors, for sure, because they want to know their audit risk, especially if you are taking over from a previous auditor.

I think board members, because it’s their risk as well. I think for due diligence in IPOs and M&A, because you’ll notice a lot of IPOs that commit accounting fraud. So I think short sellers. Regulators could use it, too.

GF: Will there be some technology available using your model?

Horton: I imagine somebody will be capitalizing on that in the future. But we’ve just got money for a postdoc to put this into AI and see what other things we can do. We have used all listed US firms from 1962 till 2020 because that’s when we wrote the paper. We use quarterly data, which we download from Compustat. Anything in the notes, as long as it’s not a repetition of another number.

Since Benford’s law is indifferent about currency or anything else, we’re going to build the model globally: put India in there, China, the UK, Europe, etc. We’re hoping this might actually improve the accuracy because it’ll have more data to learn. But to date, it’s all listed US firms.

GF: What specific changes do you see that might suggest a company is on the slippery slope?

Horton: We look at misreporting: all types of misreporting. We also looked at fraudulent security class actions. And we also look at firms that have made restatements. Nobody said it was a fraud, but nobody said it wasn’t a fraud, either. We can forecast restatements with quite a high level of accuracy.

GF: Are regulators doing anything to anticipate fraud, or are their efforts all retrospective?

Horton: It’s very difficult because the regulator is going in because something has happened. The Public Company Accounting Oversight Board [PCAOB]  looks at companies’ accounts and audit papers and tries to make sure that the accounting is being done correctly. Here in the UK, the Financial Reporting Council looked into audit papers of the FTSE 100 and basically gave them a good health score. So, I think regulators have been trying to do it, but I don’t think they’re as good as they should be.

I think regulation should be about prevention, because the people who win are the people who commit the fraud, and the people who lose—because who pays these fines?—are the shareholders. They price it in. I would have hoped the PCAOB looked at audit reports, but you still have failure.

GF: Why is so much fraud connected with IPOs? Because they don’t do enough due diligence?

Horton: If they have an IPO, they’ll be big firms, and they’ll follow International Financial Reporting Standards or US GAAP. Even if they’re private, they will still be doing so because they’re larger firms.

So, some of it is because they’re overly optimistic. If you’re overly optimistic, you’ll make more changes because you think it’s all going to happen. You are going to make those sales, right? You’ve got to look like you’ve got a future. And then, of course, they have to maintain it, even if things don’t turn out as optimistically as they thought.

GF: If your model becomes widely used, could its presence deter people or companies from committing fraud?

Horton: I hope it would. However, let’s say you’re the CEO, and you think, “Well, let’s see if I can just get away with it.” You’re going to do a cost-benefit analysis of just keeping going. Then I hope the auditors are looking at it and asking questions. Our model might improve auditing since it can provide a list of X red flags across all listed companies in the US.

Interestingly, we also find problems like a lack of an internal control system, which is also a prelude to human intervention. If you’ve been found to have poor internal controls, you’re highly likely to have this increasing human intervention.

Citing the need for a level playing field in access to critical minerals, deep-water ports and other key infrastructure or assets, the Trump Administration has paused the enforcement of the Foreign Corrupt Practices Act of 1977 (FCPA) until August, with a possible extension to February 2026.

The FCPA, which was passed on the heels of numerous corporate corruption disclosures, makes it unlawful for any corporate officer, director, employee, company agent, or company shareholder “to offer, pay, or promise to pay money or anything of value to any foreign official for the purpose of obtaining or retaining business.”

The “over expansive and unpredictable FCPA enforcement against American citizens and businesses—by our own Government—for routine business practices in other nations not only wastes limited prosecutorial resources that could be dedicated to preserving American freedoms, but actively harms American economic competitiveness and, therefore, national security,” wrote Trump in the executive order.

Under the executive order, US Attorney General Pam Bondi has until Aug. 9 to review the guidelines and policies that govern FCPA investigations and enforcement actions and issue updated guidelines as appropriate to promote Article II authority to conduct foreign affairs. Bondi can extend her deadline for another 180 days if necessary. Upon updating the guidance, Bondi will decide whether the Department of Justice’s remedial actions are needed for previous FCPA investigations and enforcements or if presidential actions are required.

According to the authors of a post on the law firm Case & White’s blog, companies should continue to use their usual business policies.

“Notwithstanding the administration’s dramatic shift in approach to FCPA enforcement, companies should remain focused on anti-bribery and corruption compliance and, as warranted, internal investigations, given the five-year statute of limitations for FCPA offenses and the ability to toll that period for up to an additional three years, the US Securities and Exchange Commission’s parallel enforcement authority with respect to issuers (at least for now), and enforcement regimes in foreign countries and at multilateral development banks,” they wrote.

While Mexico and Canada have secured a one-month reprieve from the Trump administration’s 25% tariff hike, US automakers and parts manufacturers remain on edge, awaiting further developments in the trade dispute among the three nations.

Given the deep integration of the US auto industry’s supply chain with its northern and southern neighbors, any tariff increase after the pause would come at a significant cost.

General Motors, the largest US automaker, produces 40% of its vehicles in Mexico and Canada. According to the Cato Institute, Mexican GM plants exported more than 700,000 vehicles to the US last year. Ford is less exposed. Only 358,000 of its vehicles came from Mexico in 2024. Stellantis—maker of the Chrysler, Dodge, Jeep, and Ram product lines—followed with 314,000 vehicles. The Big Three’s foreign counterparts, Toyota, Honda, and Volkswagen, are also heavily invested in North America and would suffer as well.

Bernstein Research calculates that a 25% tariff would burden the auto industry with a $110 million daily surcharge; and Jefferies, the investment bank, estimates the tariffs would add $2,700 to the average price of a vehicle. Retail prices would go up, prodding consumers to buy less.

“The North American auto industry is highly integrated, and the imposition of tariffs would be detrimental to American jobs, investment, and consumers,” says Jennifer Safavian, CEO of Autos Drive America, the lobby representing foreign carmakers.

Big brands are used to assembling vehicles in the US, Canada, and Mexico. They procure essential components, including motors, transmissions, and simple components, from across the border. Some parts cross back and forth five or six times before they are incorporated into a finished vehicle. A 2025 Cato tariff study tracked a capacitor—an electrical component in a circuit board—on its journey. It was first bought in Colorado and shipped to Ciudad Juarez in Mexico to be included in a circuit board. The component was spotted in El Paso, Texas; and Matamoros, Mexico. It finished its trajectory in two seat-manufacturing plants, in Arlington, Texas; and Mississauga, Ontario.