Interest rates are expected to fall across many key markets, which will likely lead to an active IPO and M&A market. Investors are expected to continue to consume and rely on ESG/sustainability data as part of their investment decision-making pre- and post-IPO and acquisitions.

In the world of private capital, ESG/sustainability is hardwired into the investment process, whether in raising funds aligned with the EU’s Sustainable Finance Disclosure Regulation (SFDR) or more generally to access LP capital or deploy capital in the acquisition of assets or provision of credit. Specifically, given the current trends of buy-and-build deals and carveout transactions, targets can have a different risk culture from the buyer, which makes ESG/sustainability diligence especially important for both valuation and integration purposes.

A new generation of AI tools is helping to shed light on what are challenging ESG/sustainability diligence topics like child labor, human rights violations, and other critical social factors that can degrade valuation as well as investor and customer trust. We expect increased AI use by buyers and investors to deepen their understanding of companies’ business models and risk, including through the value chain.

Geopolitics continue to have a significant influence on financial markets. Several countries will hold elections in 2026, including the US, South America (Brazil and Peru), and Israel. In the US, the political balance of Congress will have important implications for ESG/sustainability, and at the state level, various gubernatorial elections could shape the ESG/sustainability space and debate.

The post ESG and Sustainability Insights: 10 Things That Should Be Top of Mind in 2026 first appeared on ESG Foundation.

The post ESG and Sustainability Insights: 10 Things That Should Be Top of Mind in 2026 appeared first on ESG Foundation.