The top two tiers of the wealthy are, in fact, very rich, and their wealth grew by 4.2 per cent in 2023 and 4.6 per cent in 2024, amounting to an annual growth of $19 trillion, according to a study by UBS1.

At the same time, global climate investments2 are reported to be $1.9 trillion in 2023, which is one-tenth the annual increase in wealth of the super-rich. A small part of the wealth increase, $19 trillion, would have a significant impact on the needed climate investment.

Recent research has shown that the avoided costs of a rapid investment strategy are significantly higher than previously thought. The Climate Policy Initiative3 estimates that the avoided costs of a +1.5°C investment strategy, compared to the business-as-usual scenario, could be as high as $1,260 trillion from 2025 to 2100.

Corporations, the investment industry, and individual investors are not climate change deniers. They follow science and the evidence-based approach.

Companies evaluate climate risks as part of their strategy and consequently are improving their carbon footprints. Pension funds and other asset owners are evolving to become more sustainable. The investment intermediaries (investment bankers, brokers, traders, commercial banks, and consultants) increasingly offer a variety of climate-related opportunities. Individual investors are taking advantage of these trends and seeking the climate winners.

Let’s look closer. Corporations often finance their climate improvements through increased debt, such as corporate green bonds. For example, I purchased the first green bond by Apple Inc. to improve energy efficiency and use solar energy in their factories. The description of the investments was presented in the bond prospectus. The bond (ISIN: US037833CX61) from 2017 to 2027 pays a 3 per cent interest rate. Apple issues an excellent interim impact report4 of the progress made. Naturally, companies may raise funds for these environmental investments in other ways, such as issuing additional shares.

The concept of green debt, in the form of bonds, encompasses public organisations such as cities, national governments, and the World Bank. In this way, the investor may also help developing nations finance their climate investment. For example, I own a green bond issued by Brazil and another from Italy, which issued the largest public green bond in 2023. The World Bank Group, together with the IBRD, issues green bonds and makes an annual impact report5 illustrating the results of green and sustainability bonds. Sustainability bonds are a combination of both green and social projects, such as affordable housing, access to essential services, and job creation, allowing support of a broader range of environmental and social initiatives. Of course, from an ethical standpoint, the principle of "the polluter pays" suggests that those who have significantly contributed to environmental degradation should bear the costs of remedying the harm. Therefore, as citizens of developed nations, we should consider this in our allocation of our assets. The Luxembourg Stock Exchange6 gives trading data on green and sustainability bonds, and your financial advisor may help you find one.

Many pension funds often lead the way on climate investments. The New York State Common Retirement Fund7, one of the largest public pension plans in the United States, with over a million beneficiaries, has committed $40 billion to sustainable investments. Comptroller DiNapoli is concerned about climate as it poses significant risks to the pension fund's investments and society as a whole. His Climate Action Plan has committed billions to sustainable investment opportunities, and he plans to double the amount over the next decade. Most pension funds recognise that climate change increases risks to their portfolios and mandate this climate risk analysis, resulting in greater sustainable investments by the funds. Pension funds taking the lead in the UK include PensionBee, the Nest Ethical Fund, and PeoplePension. In the US, the California State Teachers' Retirement System and the California Public Employees' Retirement System remain on track to meet their climate goals.

Investment intermediaries, such as investment banks and brokers, have taken advantage of the ESG (Environmental, Social, and Governance) rating system of corporations, first promoted by British business consultant John Elkington in 1983. ESG is a set of criteria investors use to evaluate a company's impact on the environment, its relationships with people and society, and the company's corporate leadership and accountability. More recently, it has been used to indicate companies with high environmental ratings, thereby helping to select firms that are enacting climate improvements. The method has been criticised as inaccurate and misleading, such that carbon emissions data is now often used for this purpose. Investment banks and brokers can advise on how to make a portfolio of corporations less carbon-intensive. Disinvestment in fossil fuel companies is a simple example. Low-carbon ETFs are available for even the most popular indexes, such as the S&P 500.

Over the last decade, a strong demand for and supply of sustainable finance8 have developed. The global sustainable bond market reached an issuance of $872 billion in 2023, with cumulative issuance since 2018 totalling $4 trillion. Instead, the sustainable funds market had net inflows of only $63 billion compared to $557 billion in 2021. The total market value of sustainable funds is estimated to be $3 trillion as of 2023.

In addition, the top 100 sovereign wealth funds and public pension funds manage $24 trillion, with 58 per cent of them reporting on sustainability performance in 2023. Sustainable finance has never been stronger, but the concerns of the Ukraine and Gaza wars, together with climate change denialism, are likely to have dampened growth.

Notwithstanding, the individual investor has been caught up in the enthusiasm of finding the climate winners. Warren Buffett was one of the first investors in BYD9, the electric car manufacturer, whose EV sales increased from 248,000 vehicles in 2018 to over 3 million in 2023. He has done well.

Water is under increasing constraints due to climate warming, and water-related activities are becoming more critical. My favourite in this space is a small company, Badger Metering Inc.10, which is one of the best in measuring water flows and quality. Over the last eight years, the compound price growth rate has been 18 per cent/year. With the growing use of heat pumps, Carrier Corporation stands out as a leader. You can find high-scoring environmental companies with excellent overall outlooks.

Investing in climate improvement means insuring against worse outcomes, helping your grandchildren, and finding attractive opportunities. Why wait?

References

1 Global Wealth Report 2025.
2 Global Landscape of Climate Finance 2025.
3 The Cost of Inaction.
4 Annual Green Bond Impact Report, Fiscal Year 2023 Update.
5 Sustainable Development Bonds & Green Bonds.
6 Luxembourg Green Exchange.
7 New York State Common Retirement Fund.
8 Sustainable finance trends.
9 BYD Company Ltd.
10 Badger Meter, Inc.