The Asia-Pacific region is emerging as a central force in global sustainable investing heading into 2026, with record sustainable debt issuance expected next year and 80 per cent of asset owners anticipating growth in sustainable fund assets, according to BNP Paribas Asset Management.
The region’s expanding role in the global energy transition is creating “potentially significant investment opportunities,” supported by improving corporate governance, stronger business ethics, and deeper integration of sustainability practices across emerging markets.
BNP Paribas AM’s Investment Outlook for 2026 stated that despite a turbulent period for sustainable investing globally, commitment to sustainability remains resilient across both Asia Pacific and Europe.
As regulatory frameworks evolve, investors in both regions continue to lead in green bonds, decarbonisation, and climate-aligned solutions, even as political and policy headwinds emerge in parts of the world.
The firm highlighted that the physical impacts of climate change are intensifying, accelerating the need for decisive action.
While the shift to a low-carbon economy faces regulatory and political challenges, the underlying technological and societal transformations “will persist and continue to demand investors’ attention,” according to the report.
Europe remains a stronghold for sustainable investing, with governments, corporates, and investors “staying the course” and treating sustainability as a “strategic imperative.”
Together, Asia Pacific and Europe were identified as the primary regions driving the global sustainability agenda.
Beyond sustainability, artificial intelligence (AI) continues to be a transformative theme for investors. “AI is the most impactful digital transformation theme since the development of the internet,” BNP Paribas noted.
The launch of ChatGPT in late 2022 triggered a surge in investment and innovation, and momentum continues to build.
While some have questioned whether the sector is entering bubble territory, BNP Paribas currently assesses that “AI is not a bubble… yet,” while closely monitoring potential risks reminiscent of the dot-com era.
Emerging red flags include private credit and off-balance-sheet financing structures for AI projects, and circular dependencies among suppliers and customers that could pose systemic risks.
Despite these concerns, AI adoption is still in its early stages: a survey found that 78 per cent of enterprises use AI in at least one department, though only 16 per cent have deployed it across five or more.
The firm highlighted the growth of agentic AI and the eventual convergence of AI with robotics and consumer devices, which will drive productivity and earnings growth across sectors.
Looking ahead to 2026, BNP Paribas expects technology company earnings to continue appreciating, fuelled by AI-driven capital expenditure.
The US, with its flexible labour market, is likely to integrate AI more fully and rapidly than other regions, supposedly boosting productivity and profits.
Simultaneously, Europe is advancing toward greater strategic autonomy, offering “value” opportunities in its equity markets, while China’s technology sector represents the greatest profit potential amidst broader domestic economic challenges.
US equity markets are likely to continue diverging along sector lines.
In 2025, the Nasdaq 100 gained 50 per cent from post-Liberation Day lows through October, while the Russell 1000 Value index rose by less than half that, extending a long-running trend.
Nasdaq gains have largely tracked earnings growth, keeping valuations high but reasonable, whereas the Russell index’s gains have outpaced earnings, resulting in an elevated price-to-earnings (P/E) multiple.
Even if AI experiences a correction, BNP Paribas noted that interest rates are expected to fall in 2026 rather than rise, reducing the risk of a downturn, similar to 2022.
