We recently wrote about the remarkable sustainability progress that U.S. and global energy systems have made in the past several years. As we consider the likely trajectory of corporate sustainability initiatives in the immediate future, we find guidance and perspective in published academic research drawing on historical data. The implications of the research are clear: corporate sustainability initiatives tied to renewable energy system build-outs are poised to accelerate worldwide—especially in emerging markets.

Emerging Market Momentum

The energy transition in developing economies is accelerating. Many emerging markets now install far more renewable capacity annually than fossil capacity, with 85% of low- and middle-income countries adding more renewables than fossil generation in 2023. This trend is expected to continue as renewable costs fall and energy demand grows, with wind and, even more so, solar deployment in many developing regions growing twice as fast as in wealthier countries.

Recent reports in the Wall Street Journal, Reuters, and The Economist underscore a paradigm shift in capital markets: global investment in clean technologies reached record levels over the past year, far outpacing fossil fuel investments. In 2024, renewables and nuclear power generation covered two-fifths of total global generation, the highest share in history. Despite short-term headwinds, the trend toward clean energy adoption driven by rapid advances in technology appears unstoppable. This piece considers relevant research from prior technological innovations, historic cost curves, and adoption rates to help orient investors in the present, project the pace of innovation into the not-too-distant future, and inform the investment opportunity at hand.