Sustainability and Profitability: The New Investment Frontier in
High-Growth Sectors
The accelerating of climate change and sustainability concerns is fundamentally reshaping the
investment landscape, expanding opportunities within the climate and circular economy sectors.
Investors can benefit from these transformative trends. By anticipating future market dynamics
and leveraging innovative business models, investors have the potential to achieve strong
financial returns while advancing towards sustainability objectives.
The article identifies key investment opportunities across sustainability themes, with a focus on profitability,
risk management, and sustainable long-term growth, providing actionable insights for investors seeking to
align their portfolios with sustainability objectives.
The growing market for sustainability
The need to speed up climate change mitigation is driving rapid growth in both the climate and circular
economy sectors. Businesses, governments, and investors are increasingly adopting sustainable practices
to build a more resilient future.
Sustainable and environmental investments were once considered niche or higher risk, often seen as
requiring a trade-off between social impact and financial gain. This perception is rapidly shifting. Growing
awareness of climate risks and the imperative for resource efficiency have propelled sustainability into the
mainstream of investment strategy. Investors are now actively seeking opportunities that deliver both
measurable environmental benefits and competitive financial returns.
As companies transition from linear models (take-make-dispose) to circular systems (reuse, recycle,
reduce), demand is surging for innovative solutions in waste management, product design, and material
recovery. These trends are opening up new investment opportunities across industries such as
construction, fashion, food, and electronics.
Emerging perspectives and opportunities
From waste to resource management:
With rising resource scarcity and environmental pressures,
advanced recycling technologies are becoming increasingly vital. Companies pioneering solutions in
plastic recycling, electronic waste management, and organic waste processing are positioned for
significant growth. Startups reimagining circular supply chains are attracting venture capital,
promising to transform traditional waste management and foster a more sustainable economy.
Case study: Carbios
Carbios is a French biotechnology company pioneering enzymatic solutions for PET plastic and polyester
textile recycling. Carbios uses engineered enzymes (PET hydrolases) to depolymerize PET waste into its
base monomers-ethylene glycol and terephthalic acid. This process, validated in a demonstration plant
operational since 2021, handles all PET waste types, including coloured bottles, multilayer packaging, and
polyester textiles. The monomers are purified and repolymerized into virgin-quality PET, achieving full
circularity. The first industrial plant was slated for 2025, featuring reactors 20x larger than the pilot.
Strategic shareholders include companies such as L’Oreal or Michelin 2 and secured €54 million from the
French government.
Sustainable Fashion
As one of the world’s largest polluters, the fashion industry is undergoing a
major shift toward circular business models. Companies adopting closed-loop systems-designing
products for reuse, repair, and recycling-are attracting substantial investment. According to recent
research, the sustainable fashion market is projected to grow globally from $12.46 billion in 2025 to
$53.37 billion by 2032 (CAGR of 23.1%), driven by consumer awareness and stricter regulations,
whereas in Europe it is expected to grow a by a CAGR of 25,8%. On the other hand, global market
for second hand apparel was valued at US$205.0 Billion in 2024 and is projected to reach US$430.8
Billion by 2030, growing at a CAGR of 13.2% from 2024 to 2030.
Renewable energy
Investment in renewable energy remains robust. According to the International
Energy Agency (IEA), renewable energy capacity is projected to triple by 2030, with over 5,500
gigawatts (GW) of new installations expected globally. This surge will elevate renewables’ share of
global electricity generation to 46%, up from 30% in 2023, with solar and wind doubling their
combined contribution to 30%. To bridge this gap, annual clean energy investments must scale to
$4.3 trillion by 2030, creating vast opportunities for companies 6 , 7 . For example, the AI-optimized
renewable integration into the grid, aggregation models of distributed energy resources like EV
batteries and rooftop solar or circular economy solutions for renewable infrastructure are at the front
of new investments opportunities.
Case Study: ProptechCore
ProptechCore, operating through its decarbAI platform, leverages AI-driven energy optimization to
transform buildings into adaptive, grid-responsive assets. The technology integrates real-time data from
sensors, weather forecasts, and energy prices to dynamically adjust HVAC systems, lighting, and energy
storage, effectively turning buildings into «thermal batteries» that reduce carbon footprints while balancing
grid demands. Recent achievements include securing partnerships with Microsoft as a Start-up Partner,
NVIDIA’s Inception Program for AI innovation, and SmartScore/WiredScore accreditation, positioning it as
a leader in smart-ready building certifications. ProptechCore has raised significant capital through
framework agreements and grants, supported by collaborations with EU Smart Readiness initiatives and
utility providers to scale energy-adaptive solutions. Its ecosystem approach includes telcos and district
heating providers, enabling rapid deployment of AI-optimized decarbonization across real estate portfolios.
Case Study: Covestro
Covestro, a global leader in high-performance polymers, has prioritized circular economy innovations to
decarbonize industries reliant on materials like polycarbonates and polyurethanes. The company produces
recyclable resins for wind turbine blades and protective coatings for solar panels, reducing dependency on
virgin plastics. Recent milestones include a long-term renewable energy agreement with Ørsted to power
production sites with offshore wind energy, aligning with its goal of 100% renewable electricity by 2035.
Covestro’s material breakthroughs, such as bio-based aniline for low-carbon plastics, have attracted
partnerships with automotive and construction giants seeking sustainable alternatives. While specific
recent funding amounts are proprietary, Covestro’s €1.4 billion R&D investment (2021–2023) underscores
its commitment to scaling circular solutions, backed by collaborations with academia and industry consortia
to advance recycling technologies and renewable feedstocks.
Sustainable Agriculture and Food Systems
The food sector, especially in packaging, production,
and supply chain management, is experiencing significant change. Circular models in agriculture-
such as regenerative farming, vertical farming, and food waste repurposing-are gaining momentum.
The global sustainable food market is expected to reach $1 trillion by 2050, creating attractive
opportunities for impact investors.
AgFunder
AgFunder is a venture capital firm specializing in early-stage investments at the intersection of food,
agriculture, AI, and climate technology. Its investment approach focuses on «first principles» technologies
that address systemic challenges in the global food system, prioritizing scalability, sustainability, and
disruptive innovation. The firm targets deep tech solutions such as AI-driven materials discovery,
nanotechnology for ammonia production, and aquaculture platforms, with an emphasis on reducing
environmental impact and enhancing resource efficiency. AgFunder integrates proprietary research and AI
tools to identify high-potential startups, leveraging its AgFunderNews media arm and GAIA, a
knowledgebase tracking over 60,000 agtech and foodtech companies, to inform investment decisions.
In 2024, AgFunder closed its Fund IV at $102 million, surpassing its target and attracting limited partners
like GeoBlue AG, Nest, Norichukin Bank, and Alexandria Real Estate. This fund follows the acquisition of
the $100 million Blue Horizon Growth Fund, bringing AgFunder’s total assets under management to $300
million. Fund IV has already deployed over a third of its capital into startups such as Atinary Technologies
(AI for materials discovery), Nium (low-carbon ammonia production), and Aquaconnect (aquaculture tech
for smallholder farmers), reflecting a global portfolio spanning Europe, Asia, and North America.
Conclusion: Seizing the Opportunity
As global awareness of climate change intensifies, the demand for sustainable and circular business
models will continue to rise.
Investors who continue to anticipate these trends and act decisively will be best positioned to capitalize on
opportunities that deliver both strong financial returns and lasting positive environmental impact.
For capital markets and venture capitalists, the message is clear: sustainable investing has entered the
mainstream.
