Five themes for 2025

Theme 2: Big moment of truth

This series explores the five themes we expect to top the sustainability agenda in 2025. For the second theme, we examine whether a raft of incoming regulation can unlock much-needed capital to finance the climate transition.

A wave of enhanced regulatory frameworks, guidance and oversight is set to come into force this year.

  • Companies face increased disclosure requirements in terms of both their own activities (eg, the Corporate Sustainability Reporting Directive), and due diligence of their value chain via the Corporate Sustainability Due Diligence Directive from 2027.
  • Investors await the outcome of the review of Europe’s Sustainable Finance Disclosure Regulation and the implementation of new fund categorisations (the European Securities and Markets Authority requirements in Europe and the Sustainability Disclosure Requirements in the UK).
  • The uptake of the new Green Bond Standard and possible new transition plan guidance and standards are also items to watch.
  • The market will also consider the implications of proposals for an EU omnibus regulation and likely see the full impact of ESG Ratings Regulation, which affects data providers and their services.

In summary, there’s a lot going on. Much of these regulations centre around Europe, but the world is watching. The European Environment Agency has warned of Europe’s vulnerability to climate and planetary changes1, yet there is a persistent fragmentation of priorities. Policymakers, regulators, companies and investors need to come together with a simpler, pragmatic approach to accelerate transition investment.

Other challenges concern the commercial impact of these regulations. They will place heavier burdens on companies already faced with financially stretched consumers and competitive pressures. Sustainable investing remains broadly flat from three years ago2, yet the demands on investors and investee companies have ratcheted up materially through this period.

If regulation can alleviate concerns of greenwashing, and if it can motivate much-needed capital to adapt to emerging economic, climate, planetary and social opportunities, then 2025 might be a critical turning point. It will certainly be the big moment of truth.

“Big moment of truth” timeline for 2025

“Big moment of truth” timeline for 2025

Source: Allianz Global Investors, 2025



1 Climate change impacts, risks and adaptation | European Environment Agency's home page
2 Assets under management in global sustainable funds accounted for about 6% of the overall funds market in 2024, roughly the same level as in 2021. Source: JP Morgan sustainable funds monthly chartbook (Morningstar data).

  • Disclaimer
    Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal invested. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be deemed an offer to sell or a solicitation of an offer to buy any security.

    The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. We assume no obligation to update any forward-looking statement.

    The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness of the data is not guaranteed and no liability is assumed for any direct or consequential losses arising from their use. The duplication, publication, extraction or transmission of the contents, irrespective of the form, is not permitted.

    This material has not been reviewed by any regulatory authorities. In mainland China, it is for Qualified Domestic Institutional Investors scheme pursuant to applicable rules and regulations and is for information purpose only. This document does not constitute a public offer by virtue of Act Number 26.831 of the Argentine Republic and General Resolution No. 622/2013 of the NSC. This communication’s sole purpose is to inform and does not under any circumstance constitute promotion or publicity of Allianz Global Investors products and/or services in Colombia or to Colombian residents pursuant to part 4 of Decree 2555 of 2010. This communication does not in any way aim to directly or indirectly initiate the purchase of a product or the provision of a service offered by Allianz Global Investors. Via reception of this document, each resident in Colombia acknowledges and accepts to have contacted Allianz Global Investors via their own initiative and that the communication under no circumstances does not arise from any promotional or marketing activities carried out by Allianz Global Investors. Colombian residents accept that accessing any type of social network page of Allianz Global Investors is done under their own responsibility and initiative and are aware that they may access specific information on the products and services of Allianz Global Investors. This communication is strictly private and confidential and may not be reproduced, except for the case of explicit permission by Allianz Global Investors. This communication does not constitute a public offer of securities in Colombia pursuant to the public offer regulation set forth in Decree 2555 of 2010. This communication and the information provided herein should not be considered a solicitation or an offer by Allianz Global Investors or its affiliates to provide any financial products in Brazil, Panama, Peru, and Uruguay. In Australia, this material is presented by Allianz Global Investors Asia Pacific Limited (“AllianzGI AP”) and is intended for the use of investment consultants and other institutional /professional investors only, and is not directed to the public or individual retail investors. AllianzGI AP is not licensed to provide financial services to retail clients in Australia. AllianzGI AP is exempt from the requirement to hold an Australian Foreign Financial Service License under the Corporations Act 2001 (Cth) pursuant to ASIC Class Order (CO 03/1103) with respect to the provision of financial services to wholesale clients only. AllianzGI AP is licensed and regulated by Hong Kong Securities and Futures Commission under Hong Kong laws, which differ from Australian laws.

    This document is being distributed by the following Allianz Global Investors companies: Allianz Global Investors GmbH, an investment company in Germany, authorized by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin); Allianz Global Investors (Schweiz) AG; Allianz Global Investors UK Limited, authorized and regulated by the Financial Conduct Authority; in HK, by Allianz Global Investors Asia Pacific Ltd., licensed by the Hong Kong Securities and Futures Commission; in Singapore, by Allianz Global Investors Singapore Ltd., regulated by the Monetary Authority of Singapore [Company Registration No. 199907169Z]; in Japan, by Allianz Global Investors Japan Co., Ltd., registered in Japan as a Financial Instruments Business Operator [Registered No. The Director of Kanto Local Finance Bureau (Financial Instruments Business Operator), No. 424], Member of Japan Investment Advisers Association, the Investment Trust Association, Japan and Type II Financial Instruments Firms Association; in Taiwan, by Allianz Global Investors Taiwan Ltd., licensed by Financial Supervisory Commission in Taiwan; and in Indonesia, by PT. Allianz Global Investors Asset Management Indonesia licensed by Indonesia Financial Services Authority (OJK).

    4173490

Recent insights

Five themes for 2025

Our third sustainability theme for 2025 examines whether the latest data about climate impact will push governments to aspire to more ambitious targets.

Discover more

Five themes for 2025

The second of our five sustainability themes for 2025 examines whether incoming regulation can unlock capital to finance the climate transition.

Discover more

Five themes for 2025

The first of our five sustainability themes for 2025 examines how extreme weather events add urgency to the politics of climate transition.

Discover more

Allianz Global Investors

You are leaving this website and being re-directed to the below website. This does not imply any approval or endorsement of the information by Allianz Global Investors Asia Pacific Limited contained in the redirected website nor does Allianz Global Investors Asia Pacific Limited accept any responsibility or liability in connection with this hyperlink and the information contained herein. Please keep in mind that the redirected website may contain funds and strategies not authorized for offering to the public in your jurisdiction. Besides, please also take note on the redirected website’s terms and conditions, privacy and security policies, or other legal information. By clicking “Continue”, you confirm you acknowledge the details mentioned above and would like to continue accessing the redirected website. Please click “Stay here” if you have any concerns.