Security, Sustainability & Strategy: More of the same or a sea change?

Two weeks ago, the CEE Sustainable Finance Summit took place amid a complex policy environment. With the European Union aiming to increase defence expenditure, with evolving industrial strategies, and growing scrutiny of ESG regulation, one might have expected sustainability to lose its importance or momentum. Instead, the Summit revealed the opposite dynamic. Sustainability remains as a key pillar for economic competitiveness and even security considerations.

One of the main issues that emerged are the negative news headlines and the effect of the new US presidency, for example:

• “Revealed: European ‘green’ investments hold billions in fossil fuel majors” (The Guardian)

• “US Department of Energy cancels $3.7bn in climate tech awards” (NYT)

Yet the Summit showed what happens behind closed doors inside businesses and financial institutions: sustainability integration and risk management continues as planned in all major or international entities because it makes sense for efficiency, investor diversification, client attraction, market positioning, and risk management. Only smaller businesses that were already out of the CSRD scope have slowed down or paused their efforts until the final Omnibus simplification package is finalised and the requirements are clearer.

A region getting ready for the transition it needs

This year’s summit saw the highest attendance in its four-year history, affirming the region’s continued and growing engagement with the sustainability transition. The packed agenda tackled some of the most pressing and complex issues facing sustainable finance in 2025 - bridging policy, capital markets, industrial strategy, and implementation.

While too rich to summarise in full here, a few standout sessions captured key tensions and transformations underway:

• European Green Deal and competitiveness: will the regulatory rethink and the EU “omnibus” deliver what we need?  Helena Viñes Fiestas chaired an important discussion of financial leaders (Erste, PFR, RBI, EY, ING) unpacking the EU’s evolving regulatory framework - including the Omnibus Directive’s effort to simplify rules without weakening impact. Key insight: complexity is pushing firms toward compliance, not transformation. Particularly in CEE, predictability and regional alignment are vital.

• Sustainable investing vs European security and defence needs. As Russia’s invasion of Ukraine continues to reshape European priorities. This session, chaired by FT’s Raphael Minder, explored whether current ESG norms unintentionally restrict defence investments - and whether national security should now be part of the sustainability conversation. Core message: Security and sustainability aren’t opposites - they are intertwined pillars of resilience and autonomy.

• European business and Industrial Policy: pathways to increased competitiveness or an inevitable decline? In this session chaired by Julian Toth speakers from the automotive, tech, and policy worlds discussed whether the region’s industries can decarbonise and remain globally competitive. Highlights included the imperative to accelerate innovation, enhance regional collaboration, and capitalise on CEE’s skilled engineering workforce and advantageous location. Energy transition - with a prioritisation of the grid infrastructure is a key priority.

Academic Voices at the Summit

This summit also featured international academic contributions, which brought a much-needed macroeconomic and systems-thinking perspective to the transition:

• Florian Berg (MIT Sloan) shared early findings on how investors are reacting to climate-related risks and sustainability narratives in capital markets.

• Dirk Schoenmaker (Erasmus University) contextualised the financial system’s role in delivering net-zero targets across asset classes.

• Doyne Farmer (University of Oxford) showcased macro-modelling tools that help align financial flows with climate objectives - and make them economically viable.

What tied it all together?

Despite global headwinds - policy pullbacks in the US, ESG fatigue, shifting capital flows - the message was clear: sustainability isn’t going away. Yes, we may be entering a new chapter where priorities like security and economic sovereignty rise to the fore. But rather than competing with ESG, these topics are forcing it to evolve. To grow up.

The real conversation now is about alignment. Between regulation and markets. Between climate and competitiveness. Between security and sustainability. And here in CEE, that conversation is very much alive.

Full Summit Report Available Now

You can find detailed information on the Summit sessions and key highlights in the full CEE Sustainable Finance Summit 2025 report.

Just published: Sustainable Fintech in CEE

This momentum isn’t limited to events. Just last week, we published our latest report on Sustainable Fintech in Central and Eastern Europe (CEE), exploring how digital financial innovation is beginning to move the needle on sustainable finance across the region.

And as always, we’ve got you covered beyond the Summit.

Below, you'll find a filtered selection of the most relevant and recent reports, articles, and news on sustainable finance, climate policy, and geopolitics to keep you on track.

News

• European Commission: EU closing in on the 2030 climate and energy targets, according to national plans

• ESG Today: EBA Proposes Simplified ESG Reporting Requirements for Banks

• ESG Today: Germany Walks Back Call to Scrap the EU’s Supply Chain Sustainability Law

• EU Commission faces complaint over easing of sustainability rules

• The Guardian: Xi contrasts China’s clean energy promises with Trump turmoil

• The Guardian: Public affairs firms in Europe enable pollution by lobbying for big oil, says analysis

• Cambridge research: First global bond index to address fossil fuel expansion

• Reuters: British pension funds pledge $66 bln boost for private assets

• Reuters: JP Morgan creates new green banking leadership role

• The Economic Times: Finance Ministry unveils draft framework of Climate Finance Taxonomy

• UNDP: Ireland and UNDP Launch New Global Project Office for Sustainable Finance in Dublin

• News Central: African Banks Pioneer New Ways to Access Climate Finance

Articles and recommended reading

• Man Institute: Defence Stocks and ESG Roadblock Policymakers in the EU and UK are pushing sustainable investors to relax ESG criteria to allow defence investments, citing security's role in economic resilience. Despite defence stocks outperforming others, ESG funds remain underweight in the sector. Growing political pressure may lead to changes in regulations to support defence funding.

• Decarbonising residential buildings: A multi-stakeholder journey: this white paper explores the need to reduce emissions from the EU's residential building sector to achieve net-zero goals.

• Financial Times: New York’s warning to asset managers highlights risks of green retreat

• Anthropocene Fixed Income Institute: ČEZ returns to the SLB market Czech utility ČEZ currently has four outstanding Sustainability-Linked Bonds (SLBs), with one approaching its 2025 target observation date. If the company fails to meet its Scope 1&2 emissions intensity goal of 0.26 tCO₂e/MWh by the end of this year, it will be required to pay a 0.75% premium upon the bond's maturity.

• BCG: Policy Tradeoffs in the Pursuit of Green Growth Countries can accelerate green growth through clear policies, investing in carbon pricing and domestic industries while balancing imports and exports. Policymakers need to engage stakeholders and create stable, flexible frameworks that support innovation and decarbonisation.

• Financial Times: Europe’s Climate Leaders 2025: interactive listing.

• Impact Investor: BII and BCG develop new tools for scaling blended finance  British International Investment and Boston Consulting Group have created a typology and scorecard to help design and evaluate blended finance structures, aiming to unlock billions for the UN's sustainable development goals.

• Jess Middleton and John Babalola wrote an article on $1.14 trillion in corporate value located in countries most at risk from climate upheaval Up to USD 1.14 trillion in corporate value from the world’s five largest stock markets is tied to countries most vulnerable to climate change, with risks like economic instability and food insecurity expected to affect 48 nations by 2050.

• UNEPFI: How are ASEAN MemberUNEPFI: How are ASEAN Member States approaching sustainable finance taxonomies? New analysis reveals trend towards regional harmonization States approaching sustainable finance taxonomies? A UNEP FI policy brief compares sustainable finance taxonomies across five ASEAN countries, highlighting growing alignment with the regional ASEAN Taxonomy in key areas.

 Reports and publications   

• The State of Green Banks 2025 report provides a global overview of how green banks are evolving as vital tools for mobilising private capital toward climate and economic goals, especially in emerging markets and developing economies (EMDEs).

• Reuters Events White Paper titled “The State of Sustainability Reporting by US Business in 2025" shows that despite ESG backlash in the US companies are largely maintaining their sustainability goals, with 96% of targets intact and most investors still backing ESG. Despite political pressure, major firms remain committed to long-term sustainability, adopting more integrated and strategic approaches.

• Institute for Energy Economics and Financial Analysis published a report Transition credits: A potential financial enabler for the coal-to-clean switch that discusses “transition credits” as a financial tool to support the early retirement of coal power plants by monetising avoided carbon emissions when coal is replaced with clean energy. It explores how these credits could help close the financial gap between shutting down profitable coal plants and investing in renewables.

• World Economic Forum published a report Nature Positive: Corporate Assessment Guide for Financial Institutions that provides a framework to help financial institutions evaluate and support companies' efforts toward nature-positive outcome.

• Climate Policy Initiative published a report The State of Green Banks 2025: Learnings from green financing structures around the world.

• Just Transition Finance Lab published a report Mobilising bonds for the just transition: an exploratory assessment methodology of thematic sovereign bonds which introduces a framework to evaluate how green, social, sustainability, and sustainability-linked (GSS+) sovereign bonds incorporate just transition elements.

• Charting the Course: Building on Evolving Standards to Develop Robust Ocean-Related Metrics

• The Network for Greening the Financial System (NGFS) short term climate scenarios

• Clean tech for Europe: Mobilising Private Finance to Scale European Cleantech

Online community insights

• LinkedIn Post: Tim Mohin on financial institutions backing away from 1.5°C.

• LinkedIn Post: Irene Monasterolo shares insights from the Network for Greening the Financial System (NGFS) short term climate scenarios.

• LinkedIn Post: Jasper Akkermans summarises the European Council's document on how member states view the Omnibus Proposal.

• LinkedIn post: Trinomics on Bucharest's Green City Action Plan (GCAP) taking shape.

• LinkedIn article: EU Split On Green Deal

Videos & Podcasts

• Video on Youtube: Circular Economy Stakeholder Dialogue

• The CEE Sustainable Finance Summit - playlist of all sessions

Events

• 11-12 June 2025 | London, UK: Responsible Investor Europe 2025

• 21-29 June 2025 | London, UK: London Climate Action Week 2025

• 20-21 October | Budapest, Hungary: RICS Built Environment European Summit 2025: Shaping the Future of the Built Environment