The next phase of climate action: building the markets that can deliver it

September 13 - Political efforts to delay climate action came home to roost this summer. After months of deregulation talk, growth-first politics and the postponement of difficult choices, the costs of inaction are becoming harder to ignore. Lives are being lost to heat, fire and floods across continents and in growing numbers. Economic costs are escalating. Risks to water and food security are moving closer. Daily life is being affected in millions of costly and deeply inconvenient ways, and voter concern is rising.

The AI frenzy is also hitting climate and energy-related barriers. ‌In Europe and the U.S., citizens have been ahead of political and business leaders in recognising the hard limits and costs associated with massive data centre demands for energy and water. In a growing number of places, hyper-scalers are facing a “community says no” problem. But while hostile politics make it tempting to give in to fatalism about the prospects for climate action, that would be a serious mistake. For the UK and Europe, it would entrench growing physical risks while allowing China to consolidate its lead in clean technologies, batteries, grids and advanced manufacturing.

We need a new prescription. The question we need to answer is what would make solutions and business models that protect nature and stabilise the climate investable and capable of moving through whole markets, while meeting people’s near-term needs?

That means understanding why promising solutions are not scaling, then tackling barriers and using the innovation, investment appetite and local momentum already emerging across critical sectors. It also means being honest that transition will only hold politically if it improves daily life through lower bills, reliable infrastructure, secure food, decent work and confidence that change is being managed competently.

This also applies to climate adaptation. For example, in the English riverside town of Upton-upon-Severn, flood barriers, funded in part through private-sector partnership, have cut flood losses, benefiting households and insurers. Nearby towns lacking this protection face a growing insurance crisis. Scaling such proven infrastructure solutions requires active orchestration.

At the level of individual households, owners may struggle to invest in flood resilience or energy efficiency if they lack confidence in the tech or the people installing it, worry about tortuous planning permissions or don’t properly understand or benefit from the value of such investments.
Similar challenges – and therefore opportunities for practical action – face a raft of key sectors, from manufacturing to mobility.

The job ahead is sleeves-rolled-up, market-shaping work to make better options easy to buy, finance, insure, permit, install and trust. It is less glamorous than announcing big targets or launching glossy reports or hero projects, but much more effective and ‌consequential.
In practice, this may mean aggregating demand, using procurement to create confidence, aligning standards, policy and capital to scale novel solutions, and sharing risk where first movers would otherwise carry too much of it. In other words, it means staying relentlessly focused on the constraint blocking progress.

Energy is one obvious place where stale political argument should give way to practical acceleration. Clean power, electrification, storage and efficiency are already moving, and all credible analysis is unanimous on the positive economic and social benefits of accelerated transition. But the acceleration of that transition won’t happen without more capital invested in grids and storage, faster planning that maintains public consent, new flexibility markets, stronger supply chains and skills development, and credible demand signals.

China’s lead in clean technology is increasingly visible across batteries, grids, solar, electric vehicles and manufacturing capacity. Western economies should now be leveraging and orchestrating their own strengths: deep capital markets, world-class research, innovative companies, sophisticated engineering, influential cities, public procurement and large pension funds.

Similarly, rising food-security risks, belatedly moving up the political agenda, can be tackled by creating the conditions to scale the solutions already available. Biological inputs, precision farming, resilient crops, alternative proteins, better land management and digital tools are changing what is possible.
Scaling them requires procurement that rewards resilience and nutrition, finance that values healthy soils and water systems, supply-chain contracts that share transition risks fairly, and place-based partnerships that connect farmers, businesses, investors and public institutions around delivery.Government has an essential role in setting rules that make it more profitable for business to protect society than to undermine it.

As we’ve set out in our latest report, Making Markets Fit for the Future, that becomes more likely when business, finance and civil society are clear about the delivery conditions they need and support leaders prepared to build them.

Many people in business, finance and public life are concerned about the future and looking for an antidote to fatalism: a credible place to put their energy, capital and influence. The answer lies in the practical work of building markets, and the operating conditions and capabilities that make transition the stronger economic choice.

Read our new report: Making Markets Fit for the Future: The new agenda for leadership and innovation

First Published in Reuters 13 September 2026