Decarbonisation earnings resilience and economics-led adoption are reshaping global investment opportunities, say Ninety One, in their Sustainable Equities 2026 Outlook.
Sentiment towards decarbonisation has weakened in recent years, but underlying earnings performance has remained resilient.
High-quality enablers of the energy transition have continued to deliver strong, above-market earnings growth, even as valuations compressed amid policy uncertainty and higher interest rates – creating what investors see as a compelling entry point.
“Sentiment may have faltered over the past few years, but earnings have not,” said Deirdre Cooper, Head of Sustainable Equity. “High-quality enablers of decarbonisation have continued to deliver strong, above-market earnings growth, even as valuations compressed amid policy uncertainty and higher interest rates.”
Recent months have seen a recovery across clean-tech markets. While some lower-quality companies may simply be rebounding from oversold levels, others are demonstrating a more durable path to long-term value creation.
Improving sentiment has been driven by structurally rising power demand in developed markets – particularly from data centres and industrial electrification – alongside accelerating, cost-driven adoption of clean technologies in emerging markets.
“What we saw in 2025 was an energy transition increasingly driven by economics, technology and efficiency gains, rather than policy cycles,” Cooper said. “We expect this shift to continue this year and beyond, with the clean-tech market projected to triple in value to >US$2.1 trillion by 2035.”
An accelerating transition with new growth engines
The energy transition continues to advance, but its drivers are evolving. Emerging markets are now a central force, with clean technology reaching cost parity — or better — with fossil alternatives across much of the developing world. “The energy transition is still on, and it is accelerating in new ways,” said Cooper. “Emerging markets have become the growth engine of the transition.”
China’s scale and cost leadership in solar, wind, batteries and electric vehicles is reshaping global adoption patterns, enabling countries to electrify and industrialise more cleanly and affordably. Nearly half of China’s clean-tech exports now go to emerging economies, accelerating deployment across markets such as India, Thailand and Brazil.
Cooper continued: “Emerging markets are transitioning not primarily due to policy, but because clean technology makes economic sense. China’s scale and cost leadership in solar, wind, batteries and electric vehicles are transforming access to affordable clean energy across the developing world.”
Developed markets face rising power demand and efficiency needs
In parallel, developed markets are experiencing a sharp inflection in electricity demand after decades of flat consumption. Artificial intelligence, data centres, electrified heating and cooling, and industrial reshoring are driving a renewed focus on power generation, grids and efficiency.
Cooper continued: “This has turned utilities, grid operators and efficiency specialists into some of the most important enablers of the next economic growth wave. From Amazon to Coreweave, investors in AI datacentres are increasingly calling out access to power as the key bottleneck to delivering on their plans.”
This combination of rising demand and decarbonisation goals is creating significant opportunities for utilities, grid operators and companies enabling energy and industrial efficiency.
“With policy headwinds fading and fundamentals strengthening, we think developed-market clean-tech leaders have potential for a more sustained phase of growth than the broader market appears to believe as part of an all-of-the-above energy solution,” Cooper stated.
Technology expands the investable opportunity set
Advances in electrification and efficiency are broadening the scope of decarbonisation across the global economy. Today, more than 75% of final energy demand can be electrified, up from around 50% in 2000, creating new opportunities across industrial electrification, power semiconductors and energy-efficient infrastructure.
Cooper noted: “Efficiency is a critical lever both for reducing emissions and enabling new sources of power demand like data centres in an increasingly electricity short world. This creates opportunities for companies whose technologies enable smarter, cleaner and more efficient use of energy across industries.”
Beyond power and industry, innovation is also unlocking differentiated opportunities in areas such as precision agriculture, where targeted solutions can address emissions from food systems, which account for around 30% of global emissions.
Positioning for the next phase of the transition
Portfolio positioning reflects this evolving landscape, balancing defensive exposure with structural growth opportunities while increasing emphasis on emerging markets.
“Our focus remains on identifying companies with structural growth, durable competitive advantages and the ability to compound returns through cycles,” Cooper said. “The portfolio is balanced between defensive utilities that meet surging power demand in developed markets, and high-growth enablers of electrification, resource efficiency and industrial innovation.”
After a period where sentiment diverged sharply from fundamentals, markets may now be turning in favour of active investors. “The ‘transition of the energy transition”, from developed to emerging, and from policy to technology and economics — is creating new opportunities for high-quality decarbonisation solution providers,” Cooper concluded.
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