Building Resilience: Europe's Infrastructure Moment

Europe, the fastest-warming continent, faces unprecedented climate risks threatening its energy, food security, ecosystems, and critical infrastructure.

The escalating impacts of extreme weather events, from heatwaves and droughts in the south to inland flooding and windstorms, highlight an urgent need for resilient infrastructure.

Moreover, GPs must take recourse to assess how vulnerable their portcos are to climate risk. One only has to refer to the extensive power blackout at the start of May this year, which knocked out Portugal, Spain and parts of southern France for half a day, to recognise how vulnerable businesses are, not only to climate-related events but also the reliability of renewable energy grids. It was believed the blackout happened as a result of a voltage surge.

The climate challenge, however, presents a significant opportunity for European infrastructure investors. With climate investments in the EU reaching EUR498 billion in 2023 across energy, buildings, transport, and cleantech manufacturing, and private adaptation investments steadily increasing, the landscape for climate change infrastructure is ripe for strategic capital deployment.

In the first five months of 2024, there were 145 renewable energy deals, a significant increase from the same period in 2023. One of the largest deals, announced in May last year, was the acquisition of the British renewable energy firm Atlantica Sustainable Infrastructure by the US-based Energy Capital Partners for USD2.56 billion.

In 2025, the European Commission has launched new calls for projects under Horizon Europe's 2025 Work Programme, with over EUR630 million available for climate, energy and mobility research. Dan Jørgensen, Commissioner for Energy and Housing, was quoted as saying: “'Now, more than ever, we must intensify our investments to ensure a genuine Energy Union. This is key to power our competitiveness, ensure our energy security and bring down energy costs for all.”

Transport modernisation is a key focus. This is underscored by the fact that 94 transport projects are to receive nearly EUR2.8 billion in EU grants under the Connecting Europe Facility (CEF). This will help modernise railways, inland waterways and maritime routes across the trans-European transport network (TEN-T).

In many respects, infrastructure sits at the crossroads of climate change: it is both vulnerable to physical climate risks and essential to enabling the decarbonisation of the real economy.

Companies like Carbometrix are helping infrastructure investors and their assets to define and operationalise their climate strategies. This extends across the full investment cycle, from shaping a climate-aligned investment thesis, to conducting climate due diligence, building decarbonisation pathways, showcasing their green credentials or aligning with the Science Based Targets Initiative (SBTi).

“Even though climate may be less prominent in public discourse today,” says Corinne Bach, Co-CEO of Carbometrix, “infrastructure investors, from Europe to North America, remain firmly focused on decarbonisation as a strategic imperative for value creation, risk mitigation, and resilient portfolios.”

Translating science into insights

Scientific Climate Ratings translate climate science into financial insights. Their current focus is on the infrastructure sector, where the materiality of climate risk is already visible: from flood-prone roads and airports in Texas to coal-fired power plants in Germany facing early closure under transition policies.

“Investors are no longer satisfied with abstract ESG scores,” says CEO, Remy Estran. “They demand forward-looking, asset-level insights they can plug directly into financial models. We’re seeing a strong market shift from qualitative disclosure to quantifying the financial impact of climate risk; and that’s exactly the gap we aim to fill.”

Investors have the potential to turn complex climate projections into actionable financial metrics, such as expected damage, impact on cash flows, and risk-adjusted valuation.

“What used to be seen as a vague, long-term concern is now creating short-term financial frictions - from renegotiated insurance premiums to impacts on the cost of capital. Quantifying climate risk in consistent, comparable ways is becoming essential for allocating capital wisely and protecting long-term returns in infrastructure,” adds Estran.

Building a better toolkit

As GPs seek out effective ways to reduce climate risks, one effective tool being leveraged is the Private Markets Decarbonization Roadmap (PMDR).

Developed by Bain & Company on behalf of the Initiative Climat International (iCI) and the Sustainable Markets Initiative (SMI), PMDR avoids the need for a formal net-zero commitment. Rather, it provides a well signposted roadmap to help GPs assess, disclose, and reduce the carbon footprint of their portfolios.

Through its work with infrastructure funds, Carbometrix identifies three critical pillars for credible action emerging:

1) Decarbonising infrastructure means decarbonising both construction and operations.

Unlike service companies, infrastructure projects face long timelines, embedded emissions, and fragmented data.

2) Investing in climate solutions matters, but so does showing impact.

“Avoided emissions (Scope 4) need to be tracked and communicated clearly, even when they’re outside traditional carbon accounting frameworks,” advises Bach.

3) Mature investors are shifting toward qualitative frameworks.

In addition to carbon emissions datas, tools like NZIF Infra and PMDR offer a reliable way to assess alignment and communicate to clients and stakeholders with confidence.

Infrastructure resilience

Infrastructure projects need to factor in an increased capacity for resilience in the face of adverse events, which have the capacity to inflict enormous damage. According to AON’s Climate Risk Advisory business, extreme weather attributed to USD368 billion of economic loss in 2024. This year, large swathes of China have experienced record heatwaves and severe flooding; in July 2025, Beijing and parts of northern China experienced a year’s worth of rain in one week, forcing the relocation of 80,000 people.

Firms like AON advise on CapEx and OpEx considerations required by infrastructure investors to build resilience and adaptation against physical climate risks. Charles de La Ferrière, Head of Infrastructure France, AON M&A and Transaction Solutions, explains that when coupled with insurance, such adaptation approaches “improve the operational and economic resilience of both greenfield and brownfield projects”.

“Market dynamics show a growing demand for climate-aligned infrastructure, fueled by a clear realisation that resilient assets have higher valuations at exit,” comments de La Ferrière. He says investors are increasingly interested in advice on addressing acute and chronic physical climate risks through innovative insurance products.

“Climate-aligned infrastructure investing is crucial as it addresses the urgent need to reduce emissions and enhance resilience against climate impacts. It matters now because investors are aligning portfolios with climate goals, driven by an improved understanding of the advantaged economics of climate-resilient infrastructure, contributing to reduced investment risks and enhanced risk-adjusted returns,” he adds.

Europe’s climate plans are ambitious, as evidenced by Horizon Europe, LIFE, CEF Energy and the Innovation Fund. They are clearly aimed at making the continent more competitive in a global context as the demands for renewable energy, transport electrification and industry decarbonisation ratchet higher. But while there are plenty of opportunities, and signs that climate-related infrastructure is gathering momentum, challenges will still need to be overcome; principally, ensuring sufficient investment capital is put to work. In 2023, climate investments in the EU totalled EUR498 billion, some way off the EUR842 billion needed to meet 2030 EU climate targets.

The risks are pronounced.

The pace of investment will doubtless reflect this in the coming years.