Executive Summary

In January 2026, major media outlets declared that Wall Street had turned its back on climate change.1 The collapse of the Net-Zero Banking Alliance, the retreat of major asset managers from public climate commitments, and a 75 percent drop in mentions of climate on corporate earnings calls suggested a wholesale abandonment of environmental finance.

This narrative is fundamentally misleading. It mistakes the collapse of voluntary corporate signaling for the collapse of climate capital markets. The data tells a different story:

$6.2 trillion in cumulative green, social, sustainability, and sustainability-linked bonds globally2

$2.3 trillion in annual energy transition investment in 2025—the highest level ever recorded3

$20 billion raised by Brookfield for the world’s largest clean energy transition fund4

58 sovereign governments have issued labeled sustainable bonds, totaling $623 billion5

More significantly, as traditional banks have retreated from public climate commitments under political pressure, alternative asset managers—private equity, private credit, public-private partnerships and infrastructure funds—have stepped in as the de facto infrastructure banks for decarbonization and capital allocation for sustained growth.6 This structural shift from bank balance sheets to private capital represents a fundamental rewiring of how the energy transition is being financed.

The challenge is not that climate finance has collapsed but that its pace and distribution remain insufficient. Current investment levels represent only 37% of what is required to reach net zero.7 Emerging markets and developing economies—home to over half the world’s population—receive less than 15% of global clean energy investment.8 Africa receives just 2% despite having 20% of global population.9 The question is not whether capital markets have turned their back on climate, but whether the financial innovation pipeline can design securities needed to close these gaps while ensuring an inclusive energy transition in both private and public markets.