Juho Maalahti, head of Sustainable Finance Advisory at Nordea—this year’s Best Bank for Sustainability Transparency in Western Europe—discusses the next phase of sustainable finance and the impact of regulatory uncertainty.
Global Finance: What do you expect will be the biggest challenge for the sustainability market in 2026?
Juho Maalahti: While global ESG headwinds created some volatility in the sustainability market during 2025, we found that these were mostly reflected in headlines rather than in underlying market sentiment. What was particularly encouraging was seeing Nordic companies and institutions maintain their approach to sustainability despite the regulatory uncertainty that characterized much of the last year.
The fundamental need for a transition to a more resilient and sustainable economy has not disappeared. Looking ahead in 2026, we see a market where the real-economy transition continues to advance on multiple fronts, from critical infrastructure to industrial decarbonization investments. Rather than focusing on just one challenge, the key will be addressing all these areas while maintaining momentum.
GF: What are you seeing as the next “evolution” of KPIs?
Maalahti: Transparency and simplification are important factors for scaling the market further, and we’ve seen consolidation in KPI-linked facilities over the past few years. Companies are increasingly moving toward harmonization between their public non-financial reporting and financing arrangements.
We see sustainability as a natural part of Nordic DNA, and many Nordic companies—especially the large ones—have a long history in sustainability, coupled with targets to reduce climate emissions. Consistency in reporting—whether to financiers, investors, or the public—is important for transparency and market growth. We see companies wanting to ensure their sustainability metrics are aligned across different use cases.
GF: How resilient is investor demand for sustainable assets if rates stay high or politics turn? And what does that mean for issuance timing and terms?
Maalahti: Despite market volatility and uncertainty in 2025, we continued to see green bonds attracting slightly higher order books compared to conventional bonds, especially in the euro market. This demonstrates that investor appetite for sustainable assets has remained resilient even in challenging conditions.
We continue to provide financing and solutions that support our clients’ investment goals. While political and economic headwinds may create short-term volatility, the underlying demand for sustainable investments appears to be holding firm.
GF: Which risks related to sustainability will most affect company balance sheets over the near term? And what should CFOs tackle first in response?
Maalahti: While there has been uncertainty around the regulatory landscape recently, climate risks have not disappeared and continue to pose real threats to company balance sheets. We have developed our own maturity ladder concept to evaluate our customers’ climate transition plans, which helps us better understand how our customers are adapting their business models and strategies to the shift toward a low-carbon economy.
Rather than waiting for regulatory clarity, companies should focus on developing robust transition plans that address both physical and transition risks. One of our 2025 KPIs was to have 90% of our lending exposure in climate-vulnerable sectors covered by transition plans, reflecting the importance we place on proactive risk management in this area.
GF: What’s your bar for calling financing sustainable, and how do you prevent label inflation as the market grows?
Maalahti: Much of market growth, especially during the pre-Covid period, was attributable to new labels being introduced. Since then, we’ve seen harmonization and increased scalability as the market has matured. As a European bank, we adhere to global standards and European regulations. We set ourselves a target to facilitate more than €200 billion of sustainable finance by 2025, and we well exceeded that target. This achievement reflects our commitment to maintaining rigorous standards while scaling our sustainable finance offerings.