Nature is likely to accelerate as an area of investment focus, with water scarcity and the future of food and agriculture as key areas. (UBS)

Despite a bumpy 2023, investor interest in sustainable investing (SI) was generally stable. Performance was mixed, with many ESG leader indexes outperforming their benchmarks. However, many thematic-aligned stocks struggled despite real world progress on decarbonization.


In 2024, we see investor attention broadening beyond the energy transition, with increasing focus on measurement, and more nuanced understanding of sustainability and how it can drive investment decisions and outcomes.


Elections in the US and European Union and the interest rate environment will impact SI over the coming year. On the economic front, we expect a softish landing and interest rate cuts from the Fed, which should increase confidence for business investment in areas tied to sustainability.


Finally, we identify three ideas for investors to focus on in 2024:

  • The industrial transition: As renewable energy generation capacity continues to expand, focus will likely shift to other areas of the economy, creating opportunities in energy efficiency, automation, and circularity.
  • Water, food, and agriculture: Nature is likely to accelerate as an area of investment focus, with water scarcity and the future of food and agriculture as key areas.
  • Sustainable infrastructure: The G20 projects a USD 15 trillion infrastructure investment gap through 2040; we see opportunities across emerging and developed markets.

Main contributor: Andrew Lee, Amantia Muhedini, and Michelle Laliberte


For a Q&A on the future of SI, read the full report Perspectives: What is next for sustainable investing in 2024? 10 January 2024.


To learn more about the recent ESG backlash and how the US presidential election could affect sustainable investing: