In brief
One-Fifth of corporate CapEx now goes to sustainability, but demand-side adoption lags
The EU Platform on Sustainable Finance's second annual monitoring report reveals that large EU companies allocated 21% of total corporate CapEx (EUR 512 billion) to sustainability-related investments in 2025. EU Taxonomy-aligned CapEx rose 5% to EUR 330 billion, supplemented by EUR 182 billion in additional transition-supporting investment from companies with credible transition plans.
Investment remains concentrated on the supply side. Clean power, grids, and electrification infrastructure accounted for 60.9% of aligned CapEx, while electrified end-use (electric vehicles, heat pumps, industrial electrification) represented just 13%. The report warns that without accelerated demand-side adoption, additional clean generation will not translate into economy-wide emissions reductions.
On the finance side, debt remains the dominant channel. EU bank green lending surged 36% year-on-year to EUR 1.21 trillion in 2024, with households (EUR 682 billion) and non-financial corporates (EUR 507 billion) driving growth. Green bond issuance reached EUR 2.35 trillion cumulatively since 2020, with the EU Green Bond Standard emerging as a "gold standard" for Taxonomy-aligned issuance (EUR 58.8 billion to date). However, Sustainable Finance Disclosure Regulation (SFDR) Article 9 funds, the strictest sustainability category, saw EUR 20.7 billion in outflows in 2025, ling investor uncertainty ahead of the SFDR review.
The report reinforces the case for the Savings and Investments Union (SIU) to connect Europe's savings with transition investment across borders, sectors, and company sizes. It also highlights a widening divide: while 203 companies now meet the highest tier for transition plan credibility (up from 128 in 2023), a growing cohort is falling into the lowest tier, a polarisation that could undermine the EU's decarbonisation trajectory.
