Global Investment Trends in 2025: Clean Energy Surges Amid Policy Shifts

Global Investment Trends in 2025: Clean Energy Surges Amid Policy Shifts

As of June 7, 2025, the global investment landscape is experiencing significant transformations, with a pronounced shift towards clean energy and a resurgence in investment banking activities. These developments are influenced by evolving governmental policies and changing market dynamics.

Clean Energy Investments Outpace Fossil Fuels

The International Energy Agency (IEA) reports a substantial increase in global energy investments, with $2.2 trillion allocated to renewables, storage, nuclear, and grid technologies in 2025. This figure is double the investment in coal, gas, and oil, indicating a decisive move towards sustainable energy sources. Notably, electricity investments now significantly outpace those for fossil fuels. However, global demand for traditional energy sources like coal, oil, and gas continues to rise, driven especially by growth in China and India. Clean energy spending is concentrated in fossil fuel-importing nations, highlighting a shift towards domestic energy sources amid global trade uncertainties and deglobalization trends. A notable analysis even suggests that Donald Trump’s protectionist and isolationist policies may inadvertently accelerate clean energy adoption as countries move away from imported fuels. In the U.S., proposed changes to the Inflation Reduction Act (IRA) could cut projected renewable energy capacity by 10% by 2035. Additionally, the rapidly expanding energy needs of data centers may require over $170 billion in new power generation investments, further driving both clean and fossil fuel spending. Despite recent setbacks in green finance, existing projects are still receiving substantial funding, although new approvals face uncertainty from evolving fiscal and political landscapes. Follow the money

Investment Banks Anticipate Income Boom

With Donald Trump returning to the presidency, investment banking income is projected to see a significant rise in 2025, reaching $316 billion globally, a 5.7% increase from 2024, according to data from Coalition Greenwich. M&A bankers are expected to earn $27.6 billion in fees, making it their second-best year in two decades. Trump’s pro-business stance is anticipated to foster cross-border deal-making and investment, particularly from European firms. Revenues from securities trading are forecasted at $220 billion, the highest since 2022. However, geopolitical risks remain a concern. Bankers’ salaries are also set to rise, although bonuses will not reach 2021 levels. Increased hiring is observed across securities trading and various positions within the banking sector. Investment banks eye 2025 income boom as Trump drives deal rebound

Policy Shifts and Economic Implications

President-elect Trump announced a plan to fast-track permits and approvals for anyone investing $1 billion in the U.S., extending to environmental approvals. This proposal aims to simplify the typically complex regulatory processes but lacks specifics on eligibility and project types. Currently, the U.S. attracts over $177 billion in new foreign direct investment annually, although this amount is decreasing. Trump’s emphasis on expedited environmental approvals will also draw attention to the role of Lee Zeldin, the former New York congressman appointed to lead the EPA. Trump promises expedited permits for $1 billion US investment

In Europe, the investment climate appears more cautious. The European Investment Bank (EIB) reports that the proportion of EU firms planning to increase investment in 2024 has halved due to concerns about skilled labor shortages, high energy costs, and general uncertainty. The net share of firms expecting to invest more rather than less fell to 7% in 2024 from 14% in 2023. This trend is in stark contrast to U.S. firms, 47% of which prioritize capacity expansion, compared to just 26% of EU firms. Uncertainty, high energy costs, and a lack of qualified staff are significant obstacles, with 79% of European and 75% of U.S. firms citing uncertainty as a barrier. Additionally, energy costs are a problem for 77% of European firms and 68% of U.S. firms, while 77% of EU firms and 90% of U.S. firms struggle with finding qualified staff. Despite the pressing need for investment in innovation, digitalization, and the green transition, European firms are more focused on replacement investment than capacity expansion. Share of EU firms wanting to boost investment on decline, says EIB

Asset Management and Market Dynamics

The asset management industry is also undergoing notable changes. In 2024, several key themes dominated the asset management landscape. BlackRock made significant strides with acquisitions totaling over $27 billion, enhancing its presence in alternative assets and expanding capabilities, including a major AI infrastructure partnership with Microsoft. The dominance of American asset managers in Europe grew, driven by increasing demand for low-cost funds and American firms’ ability to leverage vast resources, despite the return of Donald Trump to US politics intensifying market dynamics. Additionally, major firms aggressively expanded in the Middle East to engage local investors, driven by sovereign wealth funds’ demand for local investment. Meanwhile, efforts to rejuvenate Britain’s capital markets struggled, prompting proposals for pension industry overhauls to boost domestic investments. Market expectations for rate cuts did not materialize until late in the year, but stocks, particularly in the US, continued their robust performance, influenced by Trump’s anticipated deregulatory measures. The year ended with reflections on significant mergers, strategic market shifts, and notable industry transitions. Asset Management: the year that was

In summary, 2025 is shaping up to be a pivotal year for global investments. The surge in clean energy funding, coupled with policy-driven shifts in investment banking and asset management, underscores a dynamic and evolving financial landscape. Investors are advised to stay informed and agile to navigate these changes effectively.