Banking group SEB is forecasting that 2023 will end a decade of stagnation in renewable energy investment, with an expected jump of 25 per cent in global investments to $600bn.

The Green Bond report further predicts that sustainable financing will rebound and reach a total of $1.8tr in 2023 equalling the record set in 2021.

The enhanced action is a direct result of the Ukraine war that has exposed the shortcomings of the existing energy infrastructure and SEB believes that this moment will go down in history as a political and economic turning point, with a year when an accelerated transition truly began after a lost decade of stagnation and when the world finally started aligning short-term investment with long-term climate-related objectives.

“Growth in 2023 will be driven by a stronger sustainable bond market as investments ramp up and uncertainties about interest rates, energy prices and other economic downside risks subside,” said Gregor Vulturius, advisor at climate and sustainable finance at SEB. “This will help clear the backlog of sustainable bond financing that have been put on hold during 2022. At the same time, increased regulatory and investor scrutiny means that issuers of sustainable bonds will have to put more effort into showing ambition and impact.”

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