S&P Global: Fragmented Climate and Energy Strategies Will Define 2026
Global sustainability strategies are entering a more politically complex phase in 2026 as governments and companies balance immediate economic pressures against long-term climate risks, according to S&P Global’s latest outlook on sustainability trends.
S&P Global said sustainability decision-making in 2026 will be shaped by a growing tension between near-term priorities (energy security, affordability, geopolitical risk) and longer-term realities (climate adaptation, decarbonization, resource constraints).
The result is a world moving away from multilateral coordination toward a patchwork of national and regional responses.
Regulatory fatigue reshapes supply chains, critical minerals take center stage
Trade tensions, protectionist policies, and political fatigue around sustainability regulation are pushing climate and human rights risks in supply chains out of the spotlight.
S&P Global notes that as regulatory momentum slows in some jurisdictions, companies may increasingly need to treat climate exposure as a core risk management issue rather than a compliance exercise.
The European Union (EU) remains a key exception, though its policy direction is evolving. While the bloc has introduced far-reaching disclosure and due diligence rules, it is also simplifying parts of its regulatory framework.
Meanwhile, the EU’s carbon border adjustment mechanism (CBAM), which took full effect on January 1, is expected to add at least US$15 billion in costs to imports from carbon-intensive producers, potentially reshaping global trade flows.
Furthermore, the firm said critical minerals will sit at the center of these dynamics in 2026.
Materials such as copper, lithium, and rare earths underpin electrification, clean energy deployment, and AI infrastructure, making access to them a central feature of trade diplomacy and investment.
China is expected to retain its lead in cleantech manufacturing, reinforcing its role as both a key supplier and a strategic risk for countries pursuing energy transitions.
Energy policy diverges as fossil fuels rebound, renewables expand
Another aspect of fragmentation is most visible in energy policy, where global fossil fuel demand rebounded faster than many policymakers expected after the pandemic and is projected to continue growing modestly.
In contrast, renewable energy remains the fastest-growing segment, though from a smaller base. S&P Global Energy estimates that fossil fuel demand will rise by less than 1 percent in 2026 compared with 2025, while solar and wind generation are expected to grow by more than 17 percent.
Similarly, the divergence between the world’s two largest economies is particularly stark. The US has prioritized expanding fossil fuel exports, while China continues to invest heavily across clean energy supply chains such as solar manufacturing and electric vehicles.
The report said…
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