Climate risks make or break energy infrastructure deals, new study shows
Sustainability risks – of which climate risks are a part – were the highest reported cause of deal failure in the energy infrastructure sector, according to S-RM, a consulting firm, which surveyed 150 investors in energy infrastructure.
The data shows 53% of investors reported that they had, within the previous three years, experienced deal failure linked to sustainability risks – an umbrella term that represents a broad range of issues such as resource management, adaptation and mitigation risk, environmental regulations, biodiversity and energy efficiency.
This was higher than the deal failure incidence for geopolitical risk, the second highest cause of deals falling through.
“Investors in energy and environment infrastructure are navigating a sector where sustainability risks are central to deal success”, says Ian Massey, head of corporate intelligence, EMEA at S-RM.
“Resource management, regulatory compliance, and climate resilience are increasingly shaping whether deals go ahead, reflecting a broader shift toward responsible and resilient infrastructure investing”, he adds.
Of the survey’s 150 respondents, 144 viewed sustainability risks a priority for transactions. 41% of these, reported climate adaptation and mitigation risks having an influence on investment decisions. 27% echoed the sentiment for biodiversity.
The survey was sector agnostic and even though renewable energy infrastructure fell within its scope, so did non-renewable infrastructure. For the combined market, the survey finds evidence of investor optimism.
75% of respondents viewed the combined market as an attractive investment proposition. Viewed together with deal deterministic nature of climate risks, that optimism could be more targeted in practice.
“With momentum building going into 2026, from clearer policy direction to accelerating climate innovation, the outlook is increasingly positive for investors ready to back sustainable, high-growth infrastructure”, notes Massey.
