European institutional investors remain bullish on the energy transition despite geopolitical uncertainty and inflation, according to research from IFM Investors.
The Private Markets 700 – 2026 research and trends survey, published today, of 700 senior investment professionals across 19 countries found that 81% of respondents in Europe, the Middle East and Africa (EMEA) said they saw the energy transition as a long-term source of attractive private-market opportunities, compared with 72% globally.
Speaking to IPE, Maria Nazarova-Doyle, global head of sustainable investments at IFM Investors, said pension funds want to see more clearly how sustainability contributes to returns.
Commenting on current investor sentiment towards the energy transition, Nazarova-Doyle said she felt more positive than last year.
“I’m not seeing a wholesale pullback from it,” she said.
The survey’s findings indicate that sustainability is now part of mainstream investment decisions.
Environmental and renewable energy ranked among Europe’s leading private-market opportunities, with 38% of European respondents placing it in their top three areas for future investment, against 30% globally.
Meanwhile, only advanced technologies ranked higher among European respondents.
“The notable finding is not that European investors focus on sustainability. It is that their focus remains exceptionally strong despite ongoing geopolitical tensions, inflation concerns and broader market uncertainty,” Nazarova-Doyle said in a statement.
Earlier this month, the Net-Zero Asset Owner Alliance called on private-market managers to adopt credible net-zero strategies focused on value creation and preservation.
Key findings
Investors are weighing these opportunities against greater uncertainty. More than half of European respondents (55%) cited geopolitical instability as a leading portfolio risk, while 51% cited inflation as a significant concern. In addition, 68% of EMEA respondents said they were focusing private-market allocations closer to home in western Europe.
Speakers at a recent IPE Real Assets conference described energy security and sovereignty as drivers of Europe’s energy transition.
The IMF survey also found that 63% of investors globally planned to increase their infrastructure equity allocations over the next three to five years.
Nazarova-Doyle added: “Infrastructure can play a critical role in portfolios over the next decade and beyond. Whether investing in renewable energy generation, electricity networks, digital infrastructure or energy security, investors increasingly recognise that many of the world’s most lucrative investment opportunities require structured long-term stewardship to generate returns and manage systemic risks.”
