NY Climate Week: The Language Has Changed, But the Work Continues

New York Climate Week 2025 marked a turning point in how the financial industry discusses climate investing. After attending her fifth consecutive Climate Week, ClimateAligned co-founder and Chief Commercial Officer Krista Tukiainen observed significant shifts in language, approach, and focus within the sustainable finance community.

We sat down with Krista to discuss her key takeaways from the week, the implications for investors, and what these changes mean for the future of climate finance.

ClimateAligned co-founder and CCO Krista Tukiainen

The Big Picture Shift

Natasha: What was your takeaway from New York Climate Week?

Krista: My overall takeaway was that the language of investing into climate has well and truly changed. It's shifted from talking about thematics - like social stability, climate - into using words like risk, resilience, transition, and security. And that matters because it masks a lot of the developments that are happening. I think that's intentional, largely for political reasons.

Natasha: You mentioned language shifted, masking developments. Are those developments in the right direction?

Krista: The developments are still the right ones - such as the continued boom in investing in renewables. But it does introduce potentially some inefficiencies - having to go about in such a roundabout way, avoiding specific language or labels, feels like wasted time. I think it's not dissimilar from the broader trend of moving from ESG 1.0 into ESG 2.0 and trying to work out what it actually means to invest in an evolving global economy. You could see this even in panel titles. There were very few events titled "sustainable investment" anymore. The panel I was on with JPMorgan was "sparking investment in the new energy economy." That's the kind of headline you saw across events organised by financial institutions. Yes, it's the right stuff for sure. But what was notably absent - and I think this is just hard to hold in parallel right now - social issues are completely absent in the US discussion. That's a clear sign that the refocusing is somewhere that feels apolitical and where you can find the right risk-adjusted returns. That seems to be in the new energy economy.

Natasha: Would you say the term "sustainable investor" is somewhat dead in the US?

Krista: You have to be an exceptionally brave and globally minded investor to continue to use it. I had very few such conversations. I saw [a large US institution, one of our customers] reaffirmed their commitment to this - I think they called it responsible investing - publicly.

Another interesting thing: a lot of what used to be responsible or sustainable investing teams are being restructured and absorbed into either conventional credit teams, or mandates are being broadened significantly to cover overall corporate debt and private credit, instead of for example labelled volumes specifically.

What This Means in Practice

Natasha: How does this language shift connect to the move toward engagement with high-emitting companies rather than just investing in clean solutions?

Krista: The language has shifted, so now we're doing risk management from a conventional view, but with a new understanding. We've absorbed the energy transition risk discussion into overall risk management.

Asset managers I spoke with are still engaging with high emitting companies. The engagement line has been reinforced because it's a double dividend if you get it right. You can find alpha in the companies that benefit from the speed and dynamism of the energy transition.

I really like this quote from the executive director of Galvanize: renewable energy in the US is winning in the real economy but not in the attention economy. The attention economy is still focused on the old energy mix and how to manage that. But if you look at the stats of how well renewables are doing in the US, clearly that's driving changes in the real economy.

For investors, that means looking for opportunity in companies that are changing how they generate or use energy, or how they fit into the energy supply and value chain.

Natasha: How does this shift in language relate to the reduced issuance and investment of US labelled bonds?

Krista: A lot of bankers and investors told me they're underwriting and buying more and more bonds from companies financing these energy-related transitions and assets and projects, but they more often than not don't carry the label.

Natasha: Okay. Interesting. And that may also be a good thing?

Krista: If we're trying to drive this into something where we genuinely see opportunities to make money, that's not only a negative thing. But it does slow things down, and it probably introduces unnecessary fear for issuers in using the green label. That's the worry.

Natasha: Because you still want green to be a good thing.

Krista: Exactly. It was always intended to be a signaling mechanism. If you have no signaling anymore, then clearly it's less efficient than it otherwise would be.

In the absence of those labeled volumes, and it being harder to find these opportunities in the public markets in general, almost all investors I spoke to are into private credit now. Some private equity as well. What used to be sustainable bond teams are all now looking at private credit and broader public markets that don't have the labelling associated with it.

I'm sure they'd still buy a highly rated green bond from Apple or something - everybody would buy it. But you can't rely on that to fulfil an asset owner mandate because there's just not enough to buy.

Natasha: When they're buying unlabelled bonds in these former responsible investing teams, are they still thinking about transition? Or buying any old bond?

Krista: There's still elements of that. It really depends on the investor. I spoke to some folks at bigger asset managers who definitely still have transition-minded processes to identify and evaluate companies. But I heard much less about investing into other sectors in transition, such as water companies, which is surprising given the overall emphasis on adaptation and resilience this week. Energy and hard-to-abate sectors in general was the biggest thing.

Natasha: And have people asked you about getting data on these unlabelled bonds that are likely allocated similarly to green bonds? Krista: Yes, and we have provided data on vanilla bond allocation in clients' portfolios on a custom basis in the past. It's in our roadmap to expand this coverage more broadly in our bond product. More on that soon.

Regional Contrast & What's Growing

Natasha: What about emerging markets? Green bonds seem like an easy way to invest in transitions more broadly.

Krista: The good news is if we look at broader Americas - Canada and LatAm - LatAm especially has had multiple new issuers come to market with labeled bonds this year and last year, supporting the EM story. Canadian volumes seem to be holding up to normal levels. They haven't taken such a big dip. Canada has a lot of green bond issuers and new ones coming in.

The other thing - this whole focus on energy - nuclear power has made a real comeback in full force in the US.

Natasha: That's awesome. This is great. The more power, the better.

Krista: Absolutely. Space efficient base load power - all the things we've been wanting. It's slow to bring online or back online, but that's definitely something that seems to be almost unanimously considered as part of the energy transition equation for the US, at least for now. Obviously, there's Canadian companies that have issued labeled bonds to finance nuclear as well. On the LatAm side, it's more varied in use of proceeds. That seems to be still alive and well.

Natasha: For nuclear power, was AI the motivation?

Krista: Definitely AI driven. I should have had a counter for how many times I heard data centers mentioned. It was very frequent, and nearly always mentioned hand in hand with AI expansion. We just need more power to sell. We need to bring everything we can online. We talked a lot about the hyperscaler companies helping to drive that forward. The whole ecosystem is trying to contend with what good looks like from a quality perspective - some new service provider approaches like the Moody's net zero assessment and the SPO process for some data center projects, both in Asia and in the US. I did hear a lot of people talk about security implications - if North America and the US specifically wants to not be so reliant on the rest of the world in supporting its own expansion of AI capabilities, then this energy stuff has to be onshore as well. That requires the base load power that really only nuclear can provide, but also a huge and continued expansion of renewables. Texas is the success story that is paraded around on this, which is great.

Natasha: Were people talking about grid capacity in the United States? The infrastructure is quite old.

Krista: Yes. There's recognition that there's a lot of issues, and recognition specifically that those issues are very state-dependent. When and how you're allowed to connect stuff into the grid, who's responsible for maintaining it, and so on.

Texas has a version where it's very easy - it's disconnected as well, not under the federal government. It's a standalone grid, which is why you can connect more easily. It's not only good, but it does mean renewable power is currently really cheap there. It isn't in a lot of other places.

The triangle was the discussion around grid, power and AI - how do we bring these three things into some sort of equilibrium, because they're not at that currently.

Natasha: It's interesting - the Texas case, because if there's any state-to-state connection, it falls under federal jurisdiction. Texas has intentionally not connected, which also makes it unreliable if they go out because they don't have backup.

Krista: From a mitigation point of view, Texas is a great case study. From a resilience point of view, it's actually a pretty bad case study. We've seen it a couple of times with storms, most prominently the winter storm in 2021. And they didn't immediately respond with significant resilience improvements.

I liked that the positive language changes mean we're talking about adaptation and resilience as a really central tenet. I recall a quote from Luc Gnacadja of the African Development Bank: "[E]very dollar of adaptation that doesn't deliver mitigation is maladaptation, and vice versa". We really need to start doing these things in tandem.

The Texas grid is a case in point. If it had good backup power and had been adapted to the extreme weather events that are becoming more frequent and intense because of climate - that would be great. That's both. But now it's potential maladaptation because it's not delivering both.

Every event was either energy or resilience. Energy and resilience.

The AI Angle

Natasha: What were the conversations around AI for sustainable finance work?

Krista: The bigger conversation around AI was on the environmental impact of AI. People clearly want AI solutions to do their sustainability-related work more efficiently, but it's almost like an afterthought. The elephant in the room seems to be people getting their heads around how bad [AI] actually is. Energy impact, therefore emissions impact, and water impact of building it out. How can we adapt and bring the efficiency up?

Natasha: Was AI talked about in terms of social impact - developing nations training the models?

Krista: No. None. There were a lot of discussions happening on blended finance, but less on data sovereignty outside very specific tech circles. But when we're talking about EM, the easiest embodiment and the thing that's on everybody's mind is China as part of the energy puzzle.

The Event Itself

Natasha: How did New York Climate Week feel versus London Climate Action Week?

Krista: There were a few months between the two, so it's obviously not comparing apples to apples. Still, the starkest difference was how the events were run. There were many more events, but much smaller - far fewer large anchor events. Events that used to be full day receptions with hundreds of people, open to everyone, are now a hundred people max or smaller. Closed door roundtables or similar formats, invitation only.

London Climate Action Week was definitely easier to navigate because you never really had to worry about what specific sustainability vernacular you could use. The sustainable finance language we're used to was par for the course. Whereas it almost required new language in New York because financial institutions want to avoid unnecessary attention as they try to navigate the complexities of the U.S. political landscape.

The conversations specific to the sustainable fixed income market felt easier in a sense because they were closed, small, and specific. We would only talk about this specific segment of the bond market, or a specific ESG rating, etc. It felt familiar and tactical.

This was my fifth consecutive New York Climate Week, and there was a tangible sense that this one was different.

Natasha: Do you think there are implications to the closed door format? Any negative or positive?

Krista: The positives are definitely if you curate these events well, you can have a more frank conversation and potentially be more solutions-oriented. But I think the overall learning value is definitely diminished for the sustainable finance side specifically.

This is sustainable finance specifically, to be clear. For other climate sectors, there was lots going on for broader access and learning, too. Especially for climate tech, there was lots of venture and tech stuff that folks can go and listen to. Academia's still organizing a lot because climate week is on the heels of the UN General Assembly. There's naturally a lot of policymaking related events.

In general, if this trend continues, it will make it harder for people to get into sustainable finance. It's such a concentrated week in the year to network with people you otherwise don't have access to. I'm in two minds about how it's gonna go.

Looking Forward

Natasha: Do you have any predictions? For next year and maybe the next five years?

Krista: I think for next year, it's gonna be more of the same for sure. I think investors will continue to find opportunities in the energy transition. The adaptation side of things will still require so much public sector support that it's a bit of a loose cannon for the US specifically.

There's optimism there as well. I spoke to Climate Proof on adaptation tech, and there's definitely at the beginning in the early stages lots of promising companies, also US based ones that are coming up and starting to scale their solutions. Also more specialist funds being launched.

For five years from now - I'm borrowing from a couple of conversations I had with people in asset management - it feels like this is part of a cycle still. I think it depends who takes over from Trump, but I do think this goes back and forth. I don't think it's as permanent as it might feel at the moment. My headline prediction is that green bonds will come back in the US. Whether they come back in such full force as they looked like they might at some point - maybe, maybe not. But I don't think it's a permanent death.

Natasha: What are the exciting venture things in adaptation?

Krista: This gets into nature tech versus adaptation tech. There's an accepted toolkit of people looking at especially physical risk and reintroducing things that capital markets have already done well because of insurance before. Like catastrophe modeling and cat bonds. And then companies that can be the tech layer for those. Lots of geospatial data applications and spatial finance that I find exciting because they have really interesting linkages to be the positive solution side where you can start monitoring and valuing physical risks as well.

Natasha: So we're entering ESG 3.0 - where ESG 1.0 was emissions, ESG 2.0 was trying to measure everything at once, and now 3.0 is about building specific, sophisticated tools for distinct themes like physical risk?

Krista: Exactly. The language changes do mask things like social issues being left to the side for political reasons. But they do also force refocusing. We went from an initial characterization of all the ESG issues into basically one or two ratings or score products. Then a second iteration of making those products proliferated and much more diverse and everything under the sun. And now, okay, the approaches can be sophisticated, but they only really work for the double materiality or impact lens if you make them really specific to a theme.

That's what we're starting to see. Not just in the ratings and the scores, but really those risk and impact applications across the board. That's a good thing and we knew we needed to reimagine this - that the sustainable investing promise wasn't fulfilled, and everybody in this industry knows that. I think that's just naturally happening, and it's because people are starting to see that we don't agree on what is risky and what is impactful. That's always gonna be in flux in a dynamic world, a dynamic market.

Those issues are evolving at very asynchronous paces across the world. Lots of progress on one side in Asia on the transition, and then less so in maybe North America at the moment, but that can also change. Europe has a very specific idea of what progress is - and unfortunately, there's just no way to work with that model in the US right now.

In any case, the old model [of sustainable finance] isn't fit for purpose anywhere, really. But it's not changing as drastically in Europe because it doesn't have to, at least yet. The US is having to adapt. The biggest relief was that New York Climate Week still went ahead and was bigger than people feared. Within the confines of the current system, people are doing good, groundbreaking work. Not all hope is lost.