How will climate action change in 2026? Wolf Bussian, Managing Partner Germany at our Strategic Partner A&O Shearman, shares his thoughts on the year ahead.
Two shifts will define 2026. First, climate risk stops being a forecast and becomes a balance‑sheet reality. Insurers, lenders, and rating agencies are repricing physical risk across real assets and supply chains, and that will flow through to project economics, M&A valuations, and credit terms.
Boards will move beyond ambition statements to legally robust transition plans, with scrutiny on interim targets, Scope 3 exposure, and credible capex. Litigation and enforcement will follow the data: greenwashing, product claims, and director duties will be tested more often, including in cross‑border contexts.
Second, the transition economy enters an execution phase. After years of policy design, capital is now chasing buildable projects- grids, storage, hydrogen, heat, efficiency - so the focus shifts to permitting, interconnection, and offtake certainty. Carbon pricing and border adjustments will increasingly shape trade patterns, pushing companies to localize lower‑carbon production and to verify emissions with audit‑ready data.
Expect more innovative risk‑sharing instruments and contractual structures to unlock bankability, and a sharper debate on energy security versus speed. For professional services, the work is practical: de‑risking projects, aligning disclosures with regulation across jurisdictions, and helping clients convert climate strategy into investable, defensible action.
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