As 2026 dawns, in North America it’s easy to fixate on the sector’s doldrums: policy and regulatory headwinds, and climate-specialist investors visibly shaken by policy turmoil.
Yet that regional and sector-specific negativity is misleading. In fact, 2026 is poised to be a year of stabilization and reinvestment. In fact, I believe 2026 may see a long overdue “return to normal.”
The Market Is Not The Headlines
One truth cannot be ignored: 2025’s uncertainty was heavily concentrated in U.S. markets, shaped more by policy headwinds and shallow journalism than by broader market fundamentals.
To be fair, those headwinds were real, and were both broad and specific. Tariff policies affecting renewable components such as solar modules and wind equipment, and regulatory shifts including delays in offshore leasing and grant freezes, created sense of negativity among many climate-specialist investors. In accurate anticipation of such headwinds, early in 2025 the disillusionment by investors both specialist and generalist was deep.
Yet by late 2025, at least the generalist investors report that much of this uncertainty is clearing. The most disruptive policy shifts have already been priced in, and firms that waited on the sidelines are now re-evaluating opportunities with a clearer picture. This sets the stage for more confident deployment in 2026.
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Crucially, while federal policy created headwinds, corporate climate commitments remained intact, even if marketing rhetoric softened. As a recent outlook from Franklin Templeton notes:
In late 2024, many investors expected a broad row-back on climate-related policies during 2025. While some of those concerns did materialise, that negative news flow now sits behind us. Meanwhile, corporate behaviour has proved more resilient than the regulatory backdrop might have implied.
So despite the continuing malaise among climate-specialist private equity fund managers, whatever dampened enthusiasm there may have been for climate investing in the corporate and pension fund boardrooms has now started to recover. After all, when there is a clear and obvious economic megatrend like climate change and its impacts, to steal a line from Dr. Ian Malcolm, “Money, uh… finds a way.”
Show Me The Money!
One of the common complaints among limited partner (
Will 2026 See A “Return To Normal” For Climate Investing?
