The desk believes that COP31 will be pivotal for businesses navigating sustainability amid rising geopolitical tensions and economic barriers. Per the full note , the conference's potential to align policy priorities could unlock vital investment opportunities, particularly as 92% of CEOs deem coordinated policy critical for sustainability implementation. The current market dynamics favor those poised to adapt to electrification and green technology despite headwinds in investment conditions. With no high-impact macro events imminent, focus remains on how COP31 may shape future fiscal strategies and sustainability initiatives.
What the desk is arguing
The desk asserts the continuing relevance of COP31 for businesses committed to sustainability. In an era marked by escalating geopolitical tensions and economic hurdles, the conference remains a vital platform for aligning industry with actionable climate policies. Per the full note , without robust governance, investments in green projects may not materialize as planned.
Key evidence supporting this view includes a revelation that 92% of CEOs worldwide find global governance crucial for implementing their sustainability objectives. As the demand for electrification intensifies—a move enshrined in policy discussions at COP31—businesses will need to navigate practical barriers to leverage these opportunities effectively.
Where it sits in our coverage
Our consensus target for EUR/USD currently resides at 1.075, within a range of 1.04 to 1.12. This is informed by firms such as jpmorgan forecasting 1.10 for March 2026, contrasting with bofa's lower target of 1.04.
This position aligns with the upper end of the spread—suggesting that traders who incorporate insights from COP31 could gain an edge in anticipating how sustainability commitments influence currency dynamics.
How other firms see it
Grouped views show that firms like jpmorgan align with optimistic scenarios regarding sustainability's impact on market behavior. In contrast, firms like bofa take a more cautious approach, betting on potential setbacks in green initiatives.
Positioning updates related to EUR/USD will be crucial, as the currency's trajectory may reflect the broader implications of sustainability investments emerging from COP31 discussions.
What the calendar says
Currently, there are no upcoming high-impact events scheduled that would specifically influence this narrative directly. However, market players should keep an ear to the ground for unexpected announcements related to COP31 that could shift sentiment significantly.
01COP31 remains critical for businesses pursuing sustainability amid economic barriers.
0292% of CEOs consider coordinated global policy essential for sustainability efforts.
03Electrification and green technologies are at the forefront of investment opportunities as discussed at COP31.
04Current market positioning suggests a cautious optimism towards currency movements influenced by sustainability commitments.
Market implications
Watch for potential shifts in EUR/USD around COP31 developments that might influence sustainability-driven fiscal policies. Any bullish sentiment could push the pair towards the upper end of our consensus target.
Risks to this view
Risks to this outlook involve lack of concrete policy frameworks emerging from COP31, which could deter investments in sustainable projects. Additionally, unforeseen geopolitical tensions could derail market optimism around electrification investments.
Articles COP31: Why it still matters for businesses Published 08:16 Sustainability Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Is COP still worth following? We think so. What matters for businesses is whether this year’s COP31 can improve the business case for action.
Here are four areas to watch Coco Zhang and Gerben Hieminga The global climate landscape has changed significantly since world leaders committed 11 years ago to limiting global warming to well below 2°C and pursuing efforts to limit warming to 1.5°C. Geopolitical tensions, policy shifts, trade protectionism, rising energy demand… they have all made it harder for governments to turn climate commitments into action. That raises an important question for businesses: Is the Conference of the Parties (COP) still worth following?
Our answer is yes. Businesses do not just invest in climate targets; they invest in viable projects and operations. But many of them still face economic and practical barriers.
Grid constraints and high electricity costs can slow electrification. Greener industrial products can struggle to attract buyers willing to pay a premium. And climate adaptation plans do not always translate into investable projects.
Businesses cannot solve these challenges alone. In a 2025 UN survey of more than 2,000 CEOs across 128 countries, 92% said strong global governance and coordinated policy are “critical” or “important” to implementing their sustainability agendas. That is why COP is still relevant.
It can help align policy priorities, improving investment conditions, and connecting businesses with the right resources. At COP31, four areas will be particularly important for businesses to watch. Electrification marries economic growth with sustainability Electrification is increasingly important for economic growth, energy security, and sustainability.
Demand from AI, EVs, heat pumps and industrial decarbonisation is accelerating electricity use, which is growing twice as fast as overall energy demand. Electricity also punches above its weight economically, accounting for 23% of global final energy consumption but powering 46% of global GDP. This implies that high value-added sectors rely more on electricity than the overall economy.
Electricity’s economic contribution outweighs its share of energy use Global share of electricity in final energy and GDP, 2025, in % Source: ING Research, International Energy Agency "> Source: ING Research, International Energy Agency COP31’s push to accelerate electrification reflects this trend. The COP31 presidency has set a goal of increasing electricity’s share of final energy consumption from 23% today to 35% by 2035. Getting there will require addressing a major constraint: the grid.
As we have written , grid congestion could slow electrification, increase costs, and delay electricity-dependent economic activity. The key question at COP31 is how governments turn this ambition into action. We think effective action could include: Establish a detailed electrification roadmap with interim benchmarks to guide progress and sustain momentum across future COPs Enhance knowledge-sharing platforms.
The International Smart Grid Action Network has extensive experience sharing best practices, but could go further by translating knowledge into direct technical assistance and ready-to-deploy models Set country- or sector-level targets and pathways to encourage industry alignment and commitment Improve access to finance by expanding dedicated financing for developing countries, while lowering upfront costs in Europe Improve the economics. Coordinate energy pricing reforms to make electrification more competitive with fossil fuel combustion alternatives, including by reducing taxes and grid fees that raise electricity prices Strengthen infrastructure by encouraging governments to reduce permitting barriers (e.g. Europe and the US), advance regulatory support for power demand flexibility, and expand cross-border grids where needed (e.g.
Southeast Asia) If COP31 delivers meaningful action in these areas, the implications for businesses could be significant. Stronger policy could accelerate near-term grid connections and enhance long-term investment confidence. Meanwhile, companies may need to work more closely with utilities and regulators to secure the power they need.
Green industrialisation remains critical But electrification is only part of the story. Industry is another major source of process emissions, with sectors such as steel, cement, and aviation accounting for roughly 20% of the global total. Cutting these emissions is particularly difficult because many industrial processes still have few cost-effective alternatives without lengthy site overhauls.
COP31 has therefore put green industrialisation high on the agenda, building on COP30’s progress. Following the Belém Declaration on Global Green Industrialisation at COP30, a coalition led by the Brazilian and UK governments mobilised hundreds of millions of dollars in concessional finance for Brazilian industries and awarded funding to 12 hydrogen projects. Over time, these efforts could reshape manufacturing processes and investment.
But many industrial decarbonisation technologies still face significant barriers to scaling. Their high cost premiums mean economics depend heavily on government support. Demand for cleaner industrial products remains limited.
And the necessary infrastructure for many is still underdeveloped. Hard-to-abate sectors’ green premium is way higher than what companies are willing to pay Difference in cost, low-carbon versus conventional products, in % Source: World Economic Forum, ING Research "> Source: World Economic Forum, ING Research COP31 is not setting a new level of ambition for green industrialisation. It’s focusing on implementing the existing agenda.
One priority is narrowing the demand gap. COP31 can coordinate governments to create more demand for low-carbon industrial products through long-term public procurement. If such efforts gain momentum at COP31, they could provide the long-run revenue certainty investors need to back green industrial projects at scale.
Climate finance faces multiple gaps To realise the targets and priorities set forth at COP, investment is crucial. And total flows are growing. Global climate finance reached around $2tn in 2024 and continued to grow in 2025, although at a slower rate.
Global climate finance continues to grow Finance levels in $bn Source: Climate Policy Initiative, ING Research "> Source: Climate Policy Initiative, ING Research But the headline number masks significant gaps. First, even though climate mitigation (i.e. emissions reduction) finance accounted for $1.9tn of the $2tn total, the level falls well short of estimated needs, which range from $7.6tn-$9.6tn through 2050. In areas such as electrification and green industrialisation, funding is needed not only for technologies, but also for the infrastructure and demand needed to scale them.
Second, only $64bn of the total went exclusively to adaptation, an area requiring surging investment because of intensifying climate risks. Third, a substantial share of climate finance stays within advanced economies or comes from domestic sources. International flows to help developing countries totalled only $175bn, far below COP29’s target of $1.3tn per year by 2035.
Imbalances among growing global climate finance Finance levels in $bn Source: ING Research, Climate Policy Initiative, UN, UNEP, Natural Resources Defense Council "> Source: ING Research, Climate Policy Initiative, UN, UNEP, Natural Resources Defense Council More climate products and solutions are emerging in the latter two segments. But their higher risks or weaker business cases can make it difficult to attract capital without supportive policies. Investors are actively turning to blended finance, which uses public capital to help de-risk projects and mobilise private investment.
Yet many still lack the data, resources and connections needed to move projects forward. This is where COP31 can help. As we discuss in the next section, it can help governments create more favourable investment conditions and connect suppliers, buyers and investors.
Adaptation is becoming a business imperative and opportunity Business awareness of climate adaptation has grown, as many businesses are experiencing more disruptions firsthand. Our previous analysis also shows how drought on Europe’s Rhine River, hurricanes in the US, and other extreme weather events are already affecting supply chains across sectors. In aggregate, physical climate risks could cost companies in the S&P Global 1200 index $1.2tn annually by 2050.
One barrier to corporate investment in climate adaptation is that it is still seen primarily as a way to avoid losses. But adaptation can also create business value. Investments in resilient assets, cooling systems, supplier diversification and climate-resilient materials can improve reliability, competitiveness and long-term growth.
Research from the World Resources Institute suggests that every $1 invested in adaptation can generate up to $10 in benefits. That return could be even higher for highly climate-exposed sectors. For example, the World Economic Forum estimates returns of $19–$43 per dollar invested in the food and beverage sector.
COP can help turn adaptation priorities into investable projects. Since the Paris Agreement, countries have developed National Adaptation Plans (NAPs), but many remain high-level and lack specific, actionable projects. Recent COP efforts have sought to change this by encouraging governments to translate their NAPs into portfolios of investable adaptation projects.
But identifying projects does not guarantee financing. This is where COP31 could make a difference. Its proposed Climate Implementation Bridge (BRIDGE) initiative could make projects easier for investors to identify and assess by centralising information on technical requirements, risks, costs and benefits.
Expanding the initiative to more countries could give more banks, investors and companies access to potential adaptation investments. For businesses, a successful COP31 could therefore help unlock capital for adaptation projects. The benefits could extend throughout supply chains, as companies increasingly depend on the climate resilience of their suppliers to maintain reliable operations.
Conclusion The most effective corporate sustainability strategies support long-term growth, but they are more effective with international coordination and strong policy support. COP can bring governments and businesses together to provide such a framework, even amid geopolitical tensions and concerns over slowing progress. COP31 may not deliver a landmark global agreement, but practical advances in these four priorities could still have immediate relevance for businesses.
Sustainability Corporates Content Disclaimer This publication has been prepared by ING solely for information purposes irrespective of a particular user's means, financial situation or investment objectives. The information does not constitute investment recommendation, and nor is it investment, legal or tax advice or an offer or solicitation to purchase or sell any financial instrument. Read more Share X LinkedIn E-mail Copy link Share X LinkedIn E-mail Copy link Download Authors Coco Zhang ESG Research Coco is based in New York, where she covers environmental, social and governance (ESG) topics, typically with a US flavour.
Prior to joining ING, she worked at Eurasia Group. Coco holds a dual… Gerben Hieminga Senior Sector Economist, Energy Gerben Hieminga is a Senior Sector Economist. He joined the firm in 2004 and previously used to work for the real estate team.
He holds an undergraduate degree in economics and building engineering… In this article Electrification marries economic growth with sustainability Green industrialisation remains critical Climate finance faces multiple gaps Adaptation is becoming a business imperative and opportunity Conclusion