- Since 2025, the EU has significantly simplified its sustainable finance regulatory framework (Omnibus I, revised CSRD/CSDDD, streamlined ESRS), reducing mandatory disclosure requirements by over 60%, which slows some players but allows the most committed to shift from reporting to genuine strategic integration.
- The ecological transition is now deeply shaped by geopolitical instability—trade tensions, industrial sovereignty concerns, and supply-chain vulnerabilities—requiring sustainable finance to move beyond traditional climate metrics and incorporate strategic autonomy, resource criticality, and value-chain robustness.
- The shift from fossil fuels to electrified systems creates new dependencies on critical minerals (lithium, cobalt, rare earths) that are unevenly distributed and geographically concentrated, making resource access as important as resource cost for investors and companies.
- Sustainable finance is evolving from a focus on reducing negative externalities (CO₂ avoided, waste eliminated) toward building resilience and capabilities—such as local industrial capacity, supply diversification, circular economy strategies, and infrastructure strengthening—that address climate, sovereignty, and adaptation together.
- Eco-design, resource efficiency, and the circular economy are gaining new strategic relevance, as using fewer resources is not only an environmental goal but also a sovereignty strategy in a resource-constrained and geopolitically fragmented world.
Since 2018 and the launch of the European Action Plan on Sustainable Finance, regulation has largely shaped the development of sustainable finance in Europe. EU Taxonomy (classification of sustainable activities), SFDR (transparency of financial products), CSRD (sustainability reporting), CSDDD or CS3D (due diligence): new frameworks have led companies and financial institutions to measure their impacts, produce new data, integrate sustainability issues and structure their ESG approaches.
Since 2025, the regulatory landscape has been evolving (Finance):
- With the Omnibus I package, proposed in February 2025 and adopted through a series of measures in 2025 and 2026, the European Union embarked on a major simplification of its sustainability regulatory framework.
- In February 2026, the Council of the EU gave its final approval to the simplification of the CSRD and CSDDD, reducing their scope and requirements.
- The European Sustainability Reporting Standards have also been significantly streamlined. The revised ESRS adopted by the European Commission in July 2026 reduce the number of mandatory data points to be disclosed by more than 60%.
Rather than seeing this as a retreat from sustainable finance, the current movement could mark the beginning of a new phase.
The most advanced companies are beginning to professionalise their approaches and integrate sustainability issues into their decisions. At the same time, climate change, geopolitical tensions, the growing scarcity of certain resources, industrial dependencies and ecosystem degradation continue to transform the environment in which companies and investors operate.
This raises a key question: what must sustainable finance become to remain relevant in a more unstable and constrained world?
1. A Change of Pace Rather Than a Change of Direction
The first phase in the development of European sustainable finance was largely driven by regulation.
It required many organisations to structure their data, identify their impacts, formalise their governance and develop new skills. It also helped create a common language around concepts such as double materiality, climate risks and biodiversity.
The simplification process underway in Europe does not mean that this momentum is coming to an end. The reform adopted in 2026 notably reduces the number of companies subject to the CSRD and significantly simplifies the information required. At the same time, the European Union retains a voluntary standard for smaller companies outside the mandatory scope, particularly to help them respond to information requests from large clients or financial institutions.
The transformation is now moving forward at different speeds
Large companies already subject to regulation continue to structure their processes. Some companies that have voluntarily committed to sustainability can use this period to improve data quality, professionalise their teams and, above all, better integrate sustainability into their strategy and decisions.
Others, which are no longer subject to these requirements for the time being, are slowing down their efforts. They are unlikely to start from scratch when they need to accelerate again. They will be able to draw on the tools, methodologies and experience developed by pioneers and large companies. They may also be driven forward by their clients, investors, banks or major customers.
Simplification is therefore slowing the movement for some players, while the underlying momentum continues and intensifies among the most committed. Sustainable finance is entering a new phase, one that remains shaped by regulation and reporting but is increasingly focused on integration and action.
2. The Transition Enters the Age of Geopolitics
The second transformation runs deeper: the ecological transition is now taking place in a much more unstable geopolitical environment.
During the 2010s, part of the thinking around climate action was based on the assumption of a relatively open and cooperative world: align regulations, create economic incentives, develop the necessary technologies and allow markets to accelerate their adoption. That assumption is now far more fragile.
The war in Ukraine, trade tensions between the United States and China, the pursuit of industrial sovereignty, efforts to secure supplies and conflicts affecting major trade routes have once again made value chains a strategic issue.
This is precisely the argument developed by Asterion Ventures in its article The End of Innocence: Rethinking Climate Investing in a Geopolitical Age. According to its authors, the climate constraint has not changed. What has changed is the environment in which the transition must take place.
From Fossil Fuels to Critical Minerals: New Dependencies
The energy transition illustrates this shift particularly well. Moving from a system largely based on fossil fuels to a more electrified system requires significant quantities of copper, lithium, nickel, cobalt, graphite and rare earth elements. Yet these resources are also distributed very unevenly around the world, and their processing is highly concentrated geographically.
The energy transition reduces some dependencies on fossil fuels, but creates new ones around critical minerals. The International Energy Agency (IEA) points out that traditional risks related to oil and gas supplies are now accompanied by new vulnerabilities linked to critical-mineral supply chains.
For a company or investor, the cost of a resource is no longer the only consideration: they also need to know whether it will remain available.
This development requires companies to think in terms of resource criticality, supplier diversification, the location of value chains, sovereignty and robustness.
Climate, Competitiveness and Sovereignty Are Becoming Interconnected
Asterion proposes adding four dimensions to traditional climate investment criteria: material realism, strategic autonomy, capability building and democratic compatibility. (Asterion V for Venture)
This idea matters for sustainable finance. A technology can make a major contribution to decarbonisation while creating a new strategic dependency. Conversely, locally recycling a critical material, diversifying supplies, strengthening the electricity grid or rebuilding European industrial capacity can generate benefits that go beyond emissions reductions alone.
Investment analysis is therefore becoming more systemic. What environmental impact does an investment generate? What resources does it depend on? Where are they produced and processed? What vulnerability does it create or reduce? What industrial capacity does it help build?
Geopolitics is therefore becoming an increasingly important component of sustainable finance analysis.
3. From Resilience to Regeneration
Reducing negative externalities remains essential, but it may no longer be enough
Until now, sustainable finance has primarily focused on reducing negative externalities. How many tonnes of CO₂ have been avoided? How much has water consumption been reduced? How much waste has been eliminated? These indicators remain essential.
But in the face of climate change, geopolitical tensions and limited resources, another question arises: what capabilities should we build to make our companies and economies more resilient?
Asterion describes a shift from an approach centred on externalities towards one that also focuses on capabilities.
This can mean developing local industrial capabilities, diversifying supplies, strengthening electricity infrastructure, reducing dependence on certain resources or making production systems more adaptable.
This concept of resilience also brings together areas that are often addressed separately: climate, adaptation, sovereignty, the circular economy, biodiversity and value chains.
Using fewer resources can also become a sovereignty strategy
This evolution also leads us to look differently at some well-established solutions.
Eco-design reduces the amount of material required for a product. The functional economy can encourage manufacturers to extend product lifespans. Reuse reduces the need for new resources. Industrial ecology allows one company’s waste or by-products to become another company’s resources.
In an unstable geopolitical environment, these practices no longer respond solely to environmental considerations. They can also reduce strategic dependencies.
The work of Isabelle Delannoy and Benoît Martimort-Asso on Regenerative Economic, Productive and Social Practices (known as PEPS in French), highlights models such as eco-design, the functional economy, industrial ecology, short supply chains and relocation. These practices can also help reduce certain resource dependencies and strengthen the resilience of business models.
This issue echoes European concerns around critical raw materials. The Critical Raw Materials Act notably aims to reduce the European Union’s dependencies and strengthen the resilience of its supply chains by developing extraction, processing and recycling capacities in Europe and diversifying sources of supply.
Environmental and economic strategies are therefore becoming increasingly intertwined.
4. What If “Doing Less Harm” Is No Longer Enough?
This search for resilience can take the reasoning one step further. Reducing resource consumption or dependency can limit certain vulnerabilities. But can we also imagine business models that contribute to renewing the resources and ecosystems on which they depend?
This is the question raised by the regenerative economy.
AFNOR defines it as a model of activity that acts to preserve the integrity of living systems, both human and non-human, and supports the vitality of the ecological and social ecosystems with which it co-constructs.
This approach therefore shifts the perspective: the objective is no longer solely to reduce the negative impacts of an activity, but also to consider its ability to contribute to the renewal of the systems on which it depends.
The Symbiotic Enterprise: Another Way of Thinking About Value Creation
The symbiotic economy, developed notably by Isabelle Delannoy, offers a particularly interesting framework.
It starts with a critique of the linear economic model based on the following sequence:
Extraction → Transformation → Distribution → Use → Waste
By contrast, it seeks to organise economic activity more like an ecosystem, bringing together three interdependent spheres: the biosphere, technosphere and sociosphere.
It therefore provides a way of connecting several of the practices discussed above. It encompasses a wide range of practices: agroecology, biomimicry and ecological engineering for the biosphere, circular economy, functional economy and industrial ecology for the technosphere, and cooperatives, resource pooling, commons and collective intelligence for the sociosphere.
One way of representing this evolution in economic models is through the following trajectory:
Exploit → Repair → Preserve → Regenerate
The symbiotic economy remains a specific approach within the broader regenerative economy, rather than a widely adopted framework for financial analysis. But it raises an important forward-looking question:
In the future, will sustainable finance simply measure the negative impacts avoided, or will it also seek to identify business models capable of renewing the ecological, technical and social resources on which their own value creation depends?
4. Less Visible but More Integrated Sustainable Finance?
These developments could ultimately lead to a paradox: sustainable finance could become less visible precisely as sustainability issues become more embedded in financial decisions.
Today, we still frequently distinguish between finance and sustainable finance, ESG funds and other funds, financial analysts and ESG analysts. But will this distinction remain relevant?
If an analyst needs to assess a company’s dependence on water or certain critical minerals to understand its risks, is that still ESG, or simply financial analysis?
If a banker needs to understand the credibility of a transition plan before financing an industrial investment, are they practising sustainable finance, or simply doing their job as a banker?
If a Private Equity fund analyses the resilience of a supply chain, future climate-related CAPEX requirements or a company’s exposure to the scarcity of certain resources, where does ESG analysis end and financial analysis begin?
The next phase of sustainable finance could be precisely about this integration.
- Fewer indicators monitored simply because they are required.
- More data used because they help understand a risk, dependency or opportunity.
- Less sustainability addressed in parallel with strategy.
- More sustainability integrated into investment, financing and corporate transformation decisions.
What Could Sustainable Finance Look Like in 2030?
No one can, of course, predict exactly how it will evolve. But the transformations explored in this article point towards sustainable finance that is less focused on reporting alone and more deeply integrated into the analysis of risks, dependencies and opportunities.
Climate, natural resources, biodiversity, value chains, resilience and geopolitics could play a growing role in investment and financing decisions. Regenerative approaches, meanwhile, open up a more forward-looking question about the ability of business models to strengthen the ecological and social systems on which they depend.
The destination has not necessarily changed, but the context in which the transition must take place is evolving. Sustainable finance could therefore become more financial, more strategic, more geopolitical and more systemic.
Ultimately, its success could lie in becoming a natural component of every financial decision.
Because if climate, resources, biodiversity, resilience and geopolitical dependencies become fully integrated into the analysis of risks, opportunities and value creation, will we still talk about sustainable finance, or simply finance?
This article was also inspired by the teachings of Benoît Martimort-Asso at Regen School on the geopolitics of resources and the regenerative economy.
Which trends would you add to this discussion? Feel free to share your perspectives, examples or sources in the comments to enrich this foresight exercise.
Frequently Asked Questions
The European Union launched the Omnibus I package in February 2025, significantly simplifying the CSRD, CSDDD, and ESRS frameworks. The revised standards reduce mandatory data points by over 60% and narrow the scope of companies subject to reporting, marking a shift from regulatory expansion to simplification and integration.
Not necessarily. While some companies outside the new mandatory scope may slow their efforts, the most advanced organizations are using this period to professionalize their ESG approaches and better integrate sustainability into strategy and decision-making. The underlying momentum continues among committed players, driven by clients, investors, and market expectations.
The energy transition creates new dependencies on critical minerals like lithium, cobalt, and rare earth elements, which are unevenly distributed and geographically concentrated in processing. Geopolitical tensions, trade conflicts, and the pursuit of industrial sovereignty now require investors to assess not just environmental impact but also supply chain vulnerabilities and strategic autonomy.
Traditional sustainable finance focused on reducing negative externalities such as CO₂ emissions and waste. The emerging approach also emphasizes building capabilities — such as diversifying supply chains, strengthening infrastructure, and developing local industrial capacity — to make companies and economies more resilient to climate shocks and geopolitical instability.
Beyond traditional climate metrics, investors should evaluate material realism, strategic autonomy, capability building, and democratic compatibility. This means assessing what resources an investment depends on, where they are sourced, what vulnerabilities it creates or reduces, and what industrial capacity it helps build — making investment analysis increasingly systemic.
