Investing in climate solutions across public and private markets

At the 2025 NY Climate Week, Wellington Management portfolio managers Alan Hsu and Greg Wasserman offered a fascinating look into the evolving landscape of climate investing, emphasizing the powerful synergies that arise when expertise spans both public and private markets. Their discussion, moderated by Wendy Cromwell, Head of Wellington’s Sustainable Investment, illuminated how today’s geopolitical shifts, policy dynamics, and technological advances — especially in AI — are reshaping the climate solutions space.

Defining the opportunity set

Climate solutions are multifaceted, ranging from breakthrough technologies across sectors to energy and resilient infrastructure. In public and private markets, we believe both mitigation and adaptation solutions strategies are ever more compelling. From larger public companies with the scale to tackle global challenges to growth-stage private firms driving the next generation of products and services, climate solution providers can create significant economic value through cost savings, efficiency gains, and enhanced durability — solving real-world problems. Their “green” benefits are typically a bonus, not the primary fundamental investment driver. Digital innovation remains a key focus today — including software, data-driven platforms, and software-enabled hardware — but while the past 15 years have centered on digital transformation, we believe the next decade and beyond will be defined by physical transformation. Technologies such as AI, robotics, and automation will increasingly be applied to real-world systems in energy, housing, and infrastructure to enhance efficiency, reliability, and resilience — the very attributes that climate solutions companies across public and private markets are designed to deliver. 

Geopolitics and policy: Shaping investment approaches

Deglobalization and divergent climate policies are also creating new idiosyncratic opportunities for investors. Supply chain disruptions and manufacturing shifts fuel demand for sourcing and visibility software, as well as optimization technologies. Labor shortages — driven by immigration trends and aging populations — are accelerating the demand for automation, robotics, and workforce enablement tools, particularly in sectors such as HVAC, construction, and electrical work.

AI’s transformative role

AI is rapidly changing the climate investment dialogue and, again, leading to a host of investment ideas. While much warranted attention is on data centers and their insatiable need for power to fuel AI, we also seek less obvious angles, such as “physical AI” — robotics, drones, autonomous vehicles, and machine vision. These technologies not only create new end-use cases but also serve as critical enablers, including development tools and grid management software. We believe value will increasingly accrue to companies leveraging AI to enhance physical efficiency and sustainability. Within sectors such as energy systems, agriculture, transportation, industrials, and building products, AI is driving measurable improvements in productivity. 

Concerns and optimism

Despite the broad-based excitement about mitigation and adaptation solutions, political inaction and intensifying extreme weather trends are worrying possible headwinds in combating climate change. We remain optimistic about the growing need for resilience that transcends politics. Solutions such as smarter municipal planning for flood resilience, advanced fire detection and transmission design, and the scaling of backup power through declining battery costs are a few examples of potentially unassailable societal solutions that should continue to attract funding. Companies are also tackling heat-stress monitoring for outdoor employees, while software and robotics are making supply chains and agriculture more robust against climate shocks and labor challenges.

Climate investing is evolving beyond niche markets and single technologies. It’s increasingly seen as a global, cross-sector opportunity where public and private-market expertise, geopolitical context, and innovation intersect. Many investors believe this convergence is opening up new possibilities and helping drive progress toward a more sustainable and resilient future.