Three Zones Of Safety For Investors In Uncertain Times

Forbes

29-04-2025

Could now be a moment of opportunity for investors looking to make money and a positive impact? That idea may sound nutty amidst unprecedented uncertainty and a dramatic rise in anti-environment rhetoric and actions in the macro environment. If you're spooked by the headlines, you're not alone. But once you cut through the noise, opportunities reveal themselves and the reality starts to look a bit different.
While the language around climate commitments may be shifting, many of the most influential players, from institutional investors to global corporates, are continuing undeterred. The commitments remain. The capital is still flowing. And for investors willing to look beyond the political theater, there is absolutely a way forward – possibly an even more lucrative one.
Yes, uncertainty is in the air. But here are three zones of safety I believe can weather the pushback and continue to deliver strong returns in the sustainability space.
1. Sustainability agendas are global and will continue to drive investment opportunities. Asia is a case in point.
It's not all about the United States. While climate and DEI are being leveraged for political points in the West, the demand for solutions to our greatest social and environmental challenges continues to grow. And here, the rest of the world has an opportunity to step up and fill in the gap. Asia is a case in point.
As we look forward, GDP in Asia is outpacing the rest of the world. Vietnam (6%), Indonesia (5.2%), and India (7%) are projected to be among the world's fastest-growing economies in 2025, according to the IMF. Unlike stagnating developed markets, the region provides a clearer long-term growth trajectory, supported by rising consumer demand, a burgeoning middle class, and sustained infrastructure investment.
This growth has drawn increasing attention from global investors. In January 2025, responsAbility Investments secured over $350 million for its Asia Climate Strategy, with more than half coming from private sector investors. Just earlier this month, ABC Impact, a Singapore-based private equity firm focused on Asia, closed its second fund at over $600 million, with clean energy and climate resilience among its core focus areas. Climate-focused funds in the region are gaining traction, underscoring the appetite for both impact and market-rate returns.
At the same time, many investors are starting to question preconceived notions about the risks of emerging markets. In today's environment, the traditional view that developed markets are inherently 'safer' no longer holds. Achieving strong returns in the U.S. and Europe increasingly means navigating high corporate debt levels, currently around 80% of GDP in the U.S., slower economic growth, and policy uncertainty.
By contrast, high-growth markets in Asia offer not only stronger fundamentals, but also greater resilience. That's why more investors are turning to the Asian market: not just for upside potential, but as part of a more balanced and forward-looking risk management strategy.
A recent study by the GIIN on the state of impact investing in Asia found that there is a growing opportunity for impact investors to use private capital to support these economies. To be clear, these are market-rate investments that should be of particular interest to Asia-focused investors, 76% of whom are focused on risk-adjusted, market-return investments.
Look at companies like Renew Power in India, which has grown from a small startup into one of the country's largest renewable energy companies with over 12 GW of operational capacity and backing from global investors like Goldman Sachs. Or consider Indonesia's GoTo, which is rapidly transitioning its massive ride-hailing fleet to electric vehicles while building the charging infrastructure to support it. Thailand's Energy Absolute has evolved from a biodiesel producer into a vertically integrated clean energy powerhouse spanning solar farms, EV manufacturing, and battery production. These aren't charity cases – they're market-driven opportunities that happen to be solving critical sustainability challenges.
Demonstrators hold a banner reading "Climate Justice" during a mass climate march to demand urgent ... More action on the climate crisis from world leaders attending the COP25 summit, in Madrid, on December 6, 2019. - The main march takes place in Madrid on the sidelines of the UN climate conference, with a simultaneous rally in the Chilean capital, which had been due to host the 12-day gathering but was forced to pull out due to deadly anti-government protests. (Photo by GABRIEL BOUYS / AFP) (Photo by GABRIEL BOUYS/AFP via Getty Images)
2. The climate transition can't be rolled back, but the reputational calculus has changed
Climate investing is here to stay. Yes, US-based asset managers (hello Blackrock) may be getting cold feet, and even in Europe, there are signs they may consider watering down some of their sustainability requirements for corporations working in the Eurozone. But everyone should take a deep breath. The pushback is already getting pushback.
The FT has already reported that large UK-based pension funds are sticking to their climate commitments and challenging asset managers who are walking back their climate commitments. That's significant. These pensions are ultimately accountable to their constituents, and funds like Brunel Pension and Nest are making it clear: climate alignment still matters, and they expect their managers to course-correct.
Similarly, TPG's Tim Coulter recently went on record that his firm is bullish on impact and expected them to ramp up their fundraising for climate-related strategies. When one of private equity's most successful investors sees opportunity in climate, it's worth paying attention.
Perhaps more importantly, while public equity sustainability strategies faced outflows in the first quarter, the private markets are telling a different story. Capital is coming back into key areas of the sustainability space, especially through venture and private equity. Pitchbook data shows that VC and PE firms poured more than $5 billion into climate-tech startups across the US in the first quarter, up 65% from the previous year.
As for multinational corporates, many are discovering that aspirational climate talk no longer earns reputational points, not if it's not backed up by meaningful action. The reputational value of saying the right thing has flipped; the cost of failing to deliver is now higher than the benefit of making bold but unsubstantiated promises. Just look at BlackRock: Larry Fink's climate positioning earned the firm goodwill, until it became clear that those values weren't fully embedded in strategy. That made it all too easy to walk them back when the political winds shifted.
When it comes to multinational corporates, they have global commitments that are going to be hard to pare back. They do, after all, need to factor in climate risk to their business strategies. In fact, leaders coming out of Davos in January expressed conviction that many global corporates are sticking to their knitting when it comes to their net-zero and other climate commitments.
What we'll see next isn't more big climate pledges. It's deeper integration of climate strategies into business models, and a stronger focus on tangible results. That's where capital will go, and where value will be created.
3. Opportunities to invest in the circular economy and materials transition will continue to ramp up
The transition toward circular economy business models represents one of the most undervalued investment opportunities in the sustainability space, particularly in emerging markets where growth equity can capture outsized returns. Why? Because future growth rates for critical materials are expected to significantly outpace historical patterns across all demand scenarios, especially in absolute terms. This demand is fueled by an increasingly complex global trade picture, thanks to trade wars and tariffs, pushing domestic and local / regional trade to the fore.
There's a massive gap between corporate commitments and the actual availability of circular solutions across multiple material streams. This disconnect is global but especially pronounced in high-growth markets where recycling value chains remain highly fragmented -- a perfect opportunity for investors who understand both sustainability and supply chain dynamics.
Take packaging as just one example. Demand for plastic packaging continues climbing steadily, driven partly by a preference for plastics' short use-cycle and pervasive nature. This demand is fueling the need for more sustainable packaging solutions as efforts to increase circular plastic systems and develop effective recycling systems continue to grow. But similar opportunities exist across textiles, construction materials, e-waste, and other consumer goods.
With circular business models still in their infancy across most sectors, investors have a singular opportunity to get in on the ground floor. Companies that can establish early leadership in creating high-quality recycled materials at scale will likely become acquisition targets for major packaging companies desperate to drive resiliency in their supply chains.
Where do we go from here?
Political winds will always shift, but the fundamental drivers of sustainability investments – resource scarcity, climate risk, consumer demand, and corporate commitments – aren't going away. Smart investors are looking beyond the headlines to identify opportunities where these forces create market inefficiencies they can capitalize on.
The three zones I've outlined – global sustainability investments (particularly in Asia), climate transition commitments from institutional investors and corporates, and the materials transition – represent areas where capital can find both impact and returns regardless of political rhetoric.
For investors willing to take a slightly contrarian stance in today's environment, these zones of safety might not just offer protection – they could provide some of the most compelling risk-adjusted returns of the decade. Sometimes the best investments are made when others are running scared.