Chris Iggo, Chief Investment Officer for Core Investments and Chair of the AXA IM Investment Institute, expects that despite the U.S. government adopting a more negative stance toward sustainability, the global green market will remain strong and continue to be a good choice for investors.

“Despite Trump’s campaign pledge to terminate the Inflation Reduction Act (IRA), the programme has broad bi-partisan support, with a significant amount of IRA funding going towards projects in Republican-led districts. Therefore, instead of completely dismantling it, it’s likely the Trump administration’s efforts will be more focused on adjusting the IRA.

In Europe, the commitment to reach net zero by 2050 remains strong. Here, the biggest gamechanger in recent years has not been the new US administration but the Russia-Ukraine war, which has brought the question of energy security into the spotlight. The conflict has highlighted just how closely the energy transition and energy independence are linked.

Alongside the need for greater power generation, much of which will come from renewables,the energy grid and power transmission will also require funding, offering opportunities for investors in the energy transition. Strengthening the grid will benefit all industries and consumers and the new US administration will not derail that.

Despite a sharp drop in US green bond issuance this year, the global market remains strong. This is perhaps an opportunity for investors to look at alternative geographies such as Latin America and Europe. We expect the green bond market to continue its strong growth and believe the asset class will continue to offer investors an opportunity to invest in the green transition as well as access fixed income markets.

Ultimately, security is inseparable from sustainability. We believe that, despite the uncertainty surrounding policies and politics, particularly from the new US administration, the direction of travel remains the same - the transition to a net zero economy is underway, even if the speed may ebb and flow at times.”