There was a noticeable surge in negative news related to ESG in the first half of the year, which has impacted the issuance of ESG-labelled bonds. Initially, we expected ESG issuance to total EUR 266bn in 2025, but we have adjusted our forecast down to EUR 247bn. In the financials space, that downward revision stems from less ESG-labelled senior non-preferred bonds in Q2. With regards to corporates, the issuance of ESG-labelled bonds by utilities’ companies has also fallen short of our forecast, and we now expect it to total EUR ~50bn by year-end. And, finally, concerning sovereigns, we are also downward revising our forecast for NextGenerationEU issuance in EUR 3bn, in line with the trend registered in the first half of the year.

Europe is striving to do its part in the effort to limit global warming. The first hurdle on the road to meeting the target of net zero GHG emissions by 2050 is meeting the EU climate and energy targets for 2030. The next hurdle is setting new intermediate targets for 2040. It is likely that chances of successfully setting a credible and sufficient 2040 target are influenced by the chances of meeting the 2030 target, as climate action will have to be stepped up during the period 2030-2040 in case the 2030 targets were missed. This note focuses on the probabilities of meeting the 2030 targets, based on the European Commission’s evaluation of the latest National Energy and Climate Plans (NECPs) of the individual Member States.

According to the Universal Declaration of Human Rights, everyone has the right to housing, regardless of their employment status, health, or other conditions. In this note we dive deeper into the structures of social housing in four European countries: the Netherlands, United Kingdom, Germany and France.

There is a strong likelihood that global demand for low-carbon technologies (also known as ‘clean tech’) will continue to grow in the coming years. In Europe, growth in demand for clean technologies will be driven mainly by the need to meet climate targets. It is therefore important not only to expand production capacity for clean technologies on the European continent, but above all to ensure that trade flows in clean technologies remain open and accessible. Understanding global trade flows in clean technologies and market developments in this segment is important for both businesses and policymakers involved in the energy transition. It helps to identify potential risks and opportunities. In this publication, we examine the main trends in trade flows of clean technologies in the EU-27. We not only highlight the ratios of imports and exports of clean technologies in the EU-27, but also show which countries are the most important trading partners for the EU-27. We note that there are significant differences between EU Member States in terms of trade in clean technologies and that only a handful of countries make a difference in this regard. Finally, we discuss the growth of trade in clean technologies. The data show that since 2017, trade in clean technologies has grown much more strongly than total trade in goods in the EU-27. We end this note with a conclusion.

Investments in the defence sector are projected to rise in the coming years due to growing geopolitical concerns. Given that public investment alone is insufficient to meet the sector's needs, private investors are expected to ramp up their defence-related investments. However, this prompts several questions regarding which funds could participate, especially considering the social implications of this issue. Therefore, in this note, we explore which funds are currently investing in defence, assess whether legislation permits both ESG and non-ESG funds to invest in defence-related companies, and provide a comprehensive evaluation of the involvement of ESG funds, particularly Article 9 funds, in defence-related investments.

The fight against global warming and severe weather impacts requires a global shift from fossil-fueled economic activities to a clean energy-powered and energy-efficient economy. This transition towards achieving Net Zero emissions has significant economic implications. These implications become more apparent when examining specific components of GDP rather than just the overall macroeconomic numbers. Research and models consistently indicate that the negative economic impact of physical risks in a "hot house world" scenario is far greater and more permanent than any potential negative effects of transitioning, even if the transition is disorderly. Thus, there is a strong economic incentive to mitigate global warming as much as possible. This note explores the key transmission mechanisms of transition risk into the economy, aiming to clarify its effects on different parts of the economy.

The United Nations Environment Programme (UNEP) characterizes nature-based solutions (NbS) as “initiatives designed to protect, conserve, restore, and sustainably manage ecosystems”. Examples of these solutions include ecosystem restoration, urban green spaces, and sustainable land management. In the EU, the integration of nature-based solutions across diverse landscapes is deemed crucial for fulfilling the ecosystem restoration objectives outlined in the EU Biodiversity Strategy for 2030. Additionally, NbS are considered vital for achieving climate change mitigation goals. Since the establishment of the Global Biodiversity Framework in Montreal in December 2022, there has been a slight increase in financial inflows towards nature preservation and restoration. Nevertheless, these remain substantially below the trajectory required to meet the targets set in Montreal. For the first time, the report identifies that there are USD 7 trillion of financial flows (public and private) that finance activities that have a negative impact on nature. These activities include price incentives and fiscal transfers to the agriculture sector, consumption subsidies for fossil fuels, and support for fishing capacity that exceeds the maximum sustainable yield of fish stocks. These figures could potentially be underestimated as they account only for direct impacts. Despite the substantial investment potential of NbS, the most effective measure to halt and reverse nature loss is the redirection of nature-negative financial flows. While increased public finance for NbS is crucial, more efforts would also be need to repurpose harmful subsidies if biodiversity goals are to be met. Simultaneously, governments would need to establish regulations and economic incentives to redirect private financial flows away from activities that are harmful to nature and towards nature-based solutions. In this note, we aim to explore the state of NbS, examine their financing trends over recent years, and discuss strategies to enhance investment in nature.

This publication focuses on three factors that increase production costs: energy prices, environmental taxes on gas and electricity, and the CO2 levy. First, we examine the trend in margins for highly energy-intensive companies and industrial companies that are less energy-intensive. We also look at the impact of fossil energy consumption versus energy prices. Next, we examine environmental taxes – including in an international context – and the impact of the CO2 levy on Dutch industry. Finally, we look at deindustrialisation in the Netherlands and the extent to which this has already become a reality. We also investigate how the government's announced relief measures could affect the sustainability of the sector. We will end this note with a conclusion. (Photo by Mario Caruso on Unsplash)

The Carbon Border Adjustment Mechanism (CBAM) is integral to the EU Green Deal, designed to level the playing field for domestic and foreign producers while minimizing carbon leakage. The European Commission's Omnibus proposal offers simplifications to ease administrative burdens, ensuring most emissions remain covered.

As geopolitical fears mount, EU countries are discussing options to ramp up defence spending. Currently, there are three options: finance it with debt, raise taxes and/or cut spending elsewhere, or use EU programmes.

The European Commission is considering softening its 2040 emission reduction target according to reports. The EC may stick to a proposal for a 90% reduction by 2040, but make the emission reduction back-loaded with a slower pace to 2035. This target would be consistent with a carbon budget of around 1.7 degrees, even assuming an improbable collapse in emissions post 2035. In fact, even a 95% reduction would no longer be consistent with a 1.5 degree pathway given current emission trends. Meanwhile, the use of carbon credits to meet targets may also be allowed, which could push down on ETS prices, blunting incentives. It also seems likely that targets for 2030 and beyond will in any case be missed, which would make any 2040 ambition more difficult to be met.