Dispatch from Climate Week

Fiduciary Trust International’s sustainable investing team is finally catching its breath after a busy few days spent at New York City’s Climate Week in late September. In addition to attending panels and cocktail hours with other climate-focused investors, we also had the pleasure of welcoming guests to our offices for AI & Our Energy Future, an event featuring speakers from across the climate investing ecosystem.

Climate Week is a frenetic experience that can draw attendees into discussions spanning a range of issues, but clear themes nevertheless emerge. I have paraphrased below some of the quotes we heard over the course of the week to help highlight our team’s key takeaways.

“I’m sure we’re all sick of talking about AI.”

It will surprise no one to learn that the most frequent topic of discussion at Climate Week this year was artificial intelligence (AI) and the implications of the global data center build-out. We were unabashed in making these topics the focus of our own event because they matter for our climate future, though not necessarily in the ways one might expect.

AI-focused data centers are incredibly energy intensive machines. By the end of 2027, the International Energy Agency expects a single server rack the size of a refrigerator to reach peak power draws that match the consumption of 65 households. Small data centers house hundreds of these power-hungry racks. The largest data centers, being built by Google, Amazon and other hyperscalers, contain tens of thousands.

Yet, data centers are only expected to account for roughly 2% of global electricity sector emissions by 2035.ⁱ To the extent the AI boom is a threat to our climate goals, it is not because of their direct contribution to emissions, but rather how the race to meet their power needs may shape the electricity sector for decades to come. In our haste to meet data centers’ power needs, there is a risk that we will lock in carbon-intensive power infrastructure that exacerbates the risks of climate change.

We believe the AI build-out is an investment opportunity for climate investors. The infrastructure fund managers we speak with are helping to deploy proven technologies, like renewables and batteries, that are capable of quickly and cheaply satisfying the immediate surge in power demand. Meantime, venture capital funds are financing innovative technologies that can help maximize grid utilization, improve energy efficiency, and modernize our energy system for the long-term.

“The tourists are gone.”

One of the more frequent (and frustrating) questions our team has received over the past two years has been “are people still interested in sustainable investing?” Within the United States, there has undoubtedly been a general downturn in sentiment. According to Morningstar data, “sustainable” mutual funds and ETFs suffered through a streak of 14 consecutive quarters of outflows that only ended in the second quarter of 2026.ⁱⁱ

A similar phenomenon has occurred in private markets. Generalist investors—spurred by the post-pandemic period’s low interest rates and the excitement leading up to the passage of the Inflation Reduction Act in 2022—are no longer plowing capital into climate technology and infrastructure deals.

But interest in sustainable investing has not disappeared—it’s just that the “tourists are gone.” With capital not flowing quite as freely, investment discipline has returned to the sector. Climate technology startups have pivoted from a “growth at all costs” mentality towards a focus on profitability. Competition remains fierce but it is now largely among experienced investors picking among the most promising teams, technologies and business models.

And, despite the dour headlines in the U.S., some pockets of sustainable investing have continued to grow. The Global Impact Investing Network’s annual survey of impact investors suggests that, globally, impact investing assets grew at an annual rate of 21% in the six years ending in 2025.ⁱⁱⁱ Its latest estimate puts total impact assets at $1.6 trillion globally.^iv

So while the tourists have gone and have taken their capital with them, the sustainable investing market—and particularly impact investing—remains active and robust.

“Climate adaptation is a ‘quality’ metric.”

One of the more prominent—though still not prominent enough—themes of Climate Week 2026 was climate resilience and adaptation. The world has made progress in mitigating climate change. Back in 2010, the world was on track for temperatures to rise by as much as 4 degrees Celsius relative to pre-industrial levels by 2100.^v Today, scientists project an increase of just 2.6 degrees.^vi That is progress, though not nearly enough progress to prevent severe social, environmental and economic damage.

We recently published a series of articles on climate adaptation and the growing need for businesses and investors to integrate climate risk into portfolio construction. That argument was echoed during Climate Week. During one session, a representative of a large pension fund described climate adaptation as an increasingly important measure of a company’s quality. Those firms that are analyzing their exposure to climate risk and taking steps to adapt, he noted, are much better placed to weather storms, quite literally.

We also see an increasing number of investment strategies in both public and private markets organized around the theme of climate adaptation and resilience. Currently, only a small portion of capital, both public and private, is being directed towards these solutions. But that will undoubtedly change as heat waves, forest fires, and intense storms increase in frequency and severity.

“Don’t underestimate these companies’ willingness to pay”

One of the other themes that emerged from our Climate Week event was the importance of meaningful community engagement as the data center construction boom gathers momentum. The backlash is a quintessential ESG risk. It is the kind of social and environmental threat that traditional investors might regard as immaterial, but which can ultimately have meaningful consequences for financial performance.

Data center construction has demonstrated that without considering the interests of local communities, momentum can quickly slow. The governors of Texas and New York—who are rarely on the same side of an issue—have both issued moratoria on data center development in their states. Technology companies and utilities have both undermined their relationships with customers because of their aggressive approach to the AI build-out.

One of the panelists at Fiduciary’s event noted that data center companies are increasingly willing to pay to get themselves out of their current predicament. Communities that organize effectively can extract significant “community benefits” packages from these companies and, in some cases, obtain direct subsidies for their power bills.

Going forward, business leaders and investors must pay greater attention to the needs of local communities to ensure their social license to operate does not get revoked.

Focusing on the long-term investment case

For our team, these four themes reinforce the importance of looking at opportunity and risk together. The AI build-out is creating opportunities to modernize our energy system, while a more selective market is putting profitability back in focus. Understanding how businesses manage climate risks and engage with local communities is part of assessing the factors that can support or undermine long-term financial performance.

Political noise may influence sentiment and flows, but we believe the structural foundation of the energy transition has never been stronger. Growing power needs, the push for greater energy efficiency and the need to adapt to a changing climate continue to require investment. Our focus remains fixed on the long-term horizon as we seek opportunities that can address those needs and offer competitive potential investment returns.

 

 

 

 

ⁱEnergy and AI.” International Energy Agency. April 2025.

ⁱⁱ“US Sustainable Funds Returned to Positive Flows in Q2 2026.” Morningstar. July 2026.

ⁱⁱⁱ“State of the Market 2025: Trends, Performance and Allocations.” Global Impact Investing Network. October 2025.

^iv“New Analysis Points the Way Toward the Most Effective Impact Investments and a Need for Better Data.” Stanford Social Innovation Review. April 2025.

^v“Turn Down the Heat: Confronting the New Climate Normal.” World Bank Group. November 2014.

^vi“The Big Threat Has Been Climate Change. Now Comes A.I.” The New York Times. September 2026.