A recent report by S-RM highlights that 53% of investors involved in energy and environment infrastructure have faced deal collapses due to sustainability concerns. This has become a significant issue in the sector over the last three years.
The 2025 Investor Sentiment Report: Forces of Change revealed that sustainability topped the list of reasons for these failures, surpassing both geopolitical (40%) and sanction-related risks (36%). The survey included insights from 150 investors, with 75% stating that geopolitical and political factors largely influence their investment decisions. Interestingly, sustainability issues were seen as the second most impactful factor (73%), followed closely by regulatory instability (72%) and cybersecurity (66%).
When investors were asked about the specific sustainability challenges affecting their decisions, 57% identified resource management—covering materials, water, waste, and pollution—as a key concern. Almost half (49%) pointed to adherence to environmental regulations. Other significant issues included dealing with climate change (41%), optimizing energy efficiency (37%), and managing biodiversity impacts (27%).
Despite these challenges, investor outlook remains optimistic. A strong 75% find energy and environment infrastructure a promising investment opportunity. Ian Massey, head of corporate intelligence at S-RM, emphasized the importance of addressing sustainability risks for deal success. He noted, “Investors who plan strategically around these risks can turn challenges into advantages. Those who consider sustainability early in their process will likely safeguard their investments and seize new opportunities.”
Looking ahead, many investors expect sustainability risks to play an even more significant role. In the survey, 37% anticipated an increase in such risks over the next three years, while 35% estimated that conditions would stay the same. This suggests an ongoing shift toward more responsible investment practices within the sector.
For further insights, you can explore the full report here.
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