Five sustainable investment trends to watch in 2026

In the coming years, we may realize that 2025 was a pivotal moment for sustainable investing.

The year 2025 began with the United States withdrawing from the Paris Agreement under Donald Trump: a decision quickly followed by the repeal of environmental regulations and subsidies. Last August, negotiations held in Geneva failed to establish a global treaty on plastics. In November, COP30 was a major disappointment, producing no formal agreement on phasing out fossil fuels and abandoning initiatives to establish a roadmap to end deforestation.

However, and perhaps unexpectedly, these political obstacles have somewhat stabilized sustainable investment. With investors and businesses no longer able to rely solely on government policies, 2025 marked a decisive step forward in the sustainability revolution, now underpinned not by ideology, but by tangible economic fundamentals.

It is in China that this shift has been most pronounced, with the country rapidly becoming the world’s first “electro-state.” By the end of the first half of 2025, China was on track to install twice the solar photovoltaic capacity of all other countries in the world combined. This vast expansion has allowed it to maintain stable emissions over the past 18 months, despite an increase in electricity demand . ^¹

Where China led the way, many other countries have followed suit. Thus, grid-scale battery installations have skyrocketed worldwide, a trend expected to be supported by significant investments from the US and EU countries to secure the supply of critical minerals and “energy transition metals,” including through plans to boost recovery, recycling, and reuse rates ^. (The transition is even accelerating in Texas, where solar capacity surpassed coal for the first time in ^2025. )

The shift in focus from politics to economics has fundamentally changed the landscape of sustainable investment. We believe this transition will accelerate in 2026, as sustainable technologies prove to be cheaper and simpler than existing technologies, while offering superior functionality. Here, we analyze some of the key trends we recommend investors monitor over the next twelve months.

The rise of “modularity” (i.e., the design of clean technologies as autonomous and scalable modules) gives a real competitive advantage to sustainable solutions.

Photovoltaic solar panels and battery storage solutions (which can be added in series depending on electricity needs) are disrupting traditional energy models.

This is particularly relevant to the energy sector, where photovoltaic solar panels and battery storage solutions (which can be added in series according to electricity needs) are disrupting traditional models. According to the analysis firm Wood Mackenzie (Wood Mac), photovoltaic solar power has become the cheapest form of energy in the world by 2025, with the levelized cost of electricity ( LCoE ) reaching a record low of USD 37 per MWh in the Middle East and Africa. The firm believes that continued improvements in modular efficiency will further reduce costs . ^⁴

A similar deflationary effect is also expected to occur in our food systems. For many years, precision fermentation and cultured proteins have promised to provide meat substitutes sustainably and on a large scale. Until now, costs have hampered these initiatives: cultured meat was simply too expensive. This obstacle is about to be overcome, thanks in particular to modular bioreactors, which, on the one hand, reduce research and development costs and, on the other hand, facilitate large-scale production. Companies specializing in protein substitutes have already achieved production costs considerably lower than industry forecasts ^, a trend that is expected to accelerate as startups like the Swedish company Curve move towards designing modular processes.

In agriculture, AI-controlled drones are being deployed to monitor crop growth and detect early signs of disease or crop stress, thus minimizing the use of pesticides and fertilizers.

2. Artificial intelligence: a cross-cutting catalyst

We are only just beginning to understand the potential of AI, but this technology is already facilitating sustainability-focused innovations in many sectors.

In agriculture, for example, AI-piloted drones are being deployed to monitor crop growth and detect early signs of disease or crop stress, thus minimizing the use of pesticides and fertilizers. Pesticide use is further reduced by autonomous, solar-powered weeding robots that use AI to identify weeds, pull them up, or even eliminate them with a laser beam . ^⁶

In our materials systems, considerable investments are being made in applying AI to the design of new, sustainable materials. Alphabet, Meta, NVIDIA, and IBM have all developed AI models dedicated to this task. Some startups have even created autonomous labs where AI-driven models and robots design, synthesize, and test new materials, minimizing human intervention . ^⁷

In the energy sector, AI is increasingly being deployed in smart grids to forecast electricity supply and demand, detect network failures, smooth out the intermittency of renewable energy production, integrate decentralized energy and reduce downtime through predictive maintenance ⁸ .

As electrification progresses, we move from volatile energy costs, indexed to fossil fuels and highly vulnerable to geopolitical shocks, to predictable energy.

3. Predictable Energy

The deployment of smart grids and the production of renewable electricity support a structural and sustainable transformation of our energy systems. As electrification progresses, we move from volatile energy costs, indexed to fossil fuels and highly vulnerable to geopolitical shocks, to predictable energy.

In sectors where energy represents a large portion of operating expenses, this trend will transform business models and redefine industrial competitiveness. Energy-intensive industries will increasingly invest in factories and plants located near renewable energy hubs; many will even build their own. For example, the “gigafactory” of tech giant Tesla in Nevada is entirely powered by renewable energy produced on-site or nearby .^⁹ In Australia, the mining group Rio Tinto is planning several large solar projects to power its operations . ^¹⁰

Predictable energy will strengthen macroeconomic resilience and reshape the geopolitical landscape. Fossil fuel-rich countries will see their influence diminish, while regions with abundant renewable resources (such as the southwestern United States, Australia, and parts of Southern Europe, Africa, and the Middle East) will discover that clean, renewable energy represents a decisive economic advantage.

More than two-thirds of agricultural land is used for livestock farming. In contrast, alternative proteins can be produced using 90% less land and reducing water consumption by up to 99%.

4. Free the land

More than two-thirds of agricultural land is devoted to livestock farming, which is almost 34 million km2 ^, an area larger than that of Europe, the United States and China combined ¹¹ .

In contrast, alternative proteins can be produced using 90% less land and reducing water consumption by up to 99% .^¹² Given the immense resource consumption associated with animal agriculture, any significant shift toward alternative proteins would free up vast tracts of land and allow entire ecosystems to be returned to nature. Thanks to modular bioreactors that are lowering the costs of producing cultured meat and other lab-grown alternatives, this long-awaited benefit is closer than ever.

Our cities are likely to reclaim land, as the advent of AI-driven autonomous vehicles frees up urban spaces. Forecasts vary, but it is generally accepted that the adoption of autonomous vehicles will reduce the number of private cars. As the car fleet shrinks, billions of square meters of on-street and off-street parking could be converted into green spaces. For example, according to a World Economic Forum study, the deployment of autonomous vehicles could cut Boston’s parking needs in half . ^¹³

Autonomous vehicles are also safer: after more than about 200 million kilometers driven, Waymo, the leading provider of driverless taxis in the United States, has observed a 90% decrease in the rate of serious accidents ¹⁴ , significantly reducing personal injury as well as the resources needed to repair or replace vehicles.

Wearable medical devices are increasingly integrated into healthcare systems, thus facilitating early intervention

5. From treating symptoms to preserving health

While sustainability is often associated with the fight against climate change, building a truly sustainable global economy also requires reducing economic inequalities. Health is central to this issue.

Medical costs have skyrocketed in many developed countries, putting public finances under pressure and restricting access to quality care. However, the sector is currently undergoing a fundamental structural transformation.

^{It is estimated that one in eight Americans has already tried, or is currently using, GLP- 1} weight-loss drugs  (GLP-1 receptor agonists), a trend that is profoundly transforming consumer behavior. In the United States, GLP-1 users have been found to spend 11% less on processed and unhealthy foods in the month following the start of their treatment ^. In the United Kingdom, the CEO of the Greggs bakery chain says his company’s profits have “undoubtedly” declined as a result of GLP-1 use.

Meanwhile, given AI’s ability to analyze large datasets and detect any change in trends, wearable medical devices are becoming increasingly integrated into healthcare systems, thus facilitating early intervention.17 ^AI is also revolutionizing drug discovery, accelerating the research and development process and rapidly reducing the costs of genetic screening.

This has resulted in a shift from treating symptoms to providing accessible healthcare, driven by a desire to stay healthy longer and the lower costs of early, personalized intervention.

Systemic changes fuel sustainable investment

After years of ostentatious virtue in politics and sustainability, economic reality has taken over. Deep, sustainable, and innovation-driven transitions are taking place within our energy, industrial, consumption, and healthcare systems, where technology (particularly AI) is acting as a cross-cutting catalyst across all sectors and industries.

At the same time, the definition of a “sustainable economy” is evolving. Sustainability is no longer limited to simply reducing emissions, nor to mandatory compliance, nor even to sacrificing prosperity. It is about establishing a superior economic system that generates lower costs, increased productivity, greater resilience, and better outcomes for the planet and its inhabitants.

Despite political rhetoric, at Lombard Odier we believe that 2026 will confirm the unprecedented speed and scale of the transition to sustainability, as we move towards a “net-zero” economy that is positive for nature, socially constructive and facilitated by digital transformation.