When the tap runs dry: the long-term investment case for Energy Efficiency

Recent events have highlighted, once again, a structural vulnerability that the global economy has yet to fully resolve. When the Strait of Hormuz closed and Brent crude surged above $110 per barrel, governments reached for the usual responses: strategic reserve releases, rerouted pipelines, emergency diplomacy.

The uncomfortable truth is that there is no reliable hedge against fossil fuel dependence concentrated in politically volatile regions. Supply can be diversified, but the underlying exposure cannot be fully managed through logistics or diplomacy alone. One of the most compelling answers that compounds over time, that improves national competitiveness, and that simultaneously addresses climate risk is using less energy in the first place. For investors, that insight points toward one of the most structurally compelling opportunities available today.

That conviction is central to the investment philosophy of Nordea’s Global Climate and Environment Strategy and it has rarely felt more relevant.

A Strategy Focused on Today’s Climate Challenges

Resource Efficiency is not simply a theme within this strategy, it is the dominant conviction, accounting for approximately 70% of our total allocation. That reflects a long-held belief that the most economically and environmentally compelling opportunities in the green transition are not confined to generating new clean energy, important as that is, but lie in dramatically improving the efficiency of the energy systems, buildings, industrial processes, and digital infrastructure we already have.

Buildings alone account for nearly 34% of global CO₂ emissions and remain chronically under-invested in efficiency upgrades¹. Industrial operations consume energy at rates that modern automation and digitalization can materially reduce. And data centres, the physical infrastructure underpinning the artificial intelligence revolution, are consuming electricity at a rate comparable to entire nations². In our view, each of these challenges represents a meaningful investment opportunity for a company with the right solutions.

Nordea’s Global Climate and Environment Strategy is built around exactly that premise. As an Article 9 product under SFDR,³ sustainable investment is not a secondary consideration but the explicit objective. We invest in global companies providing market-based solutions designed to address pressing climate and environmental challenges — businesses whose products and services are already deployed and generating revenue.

Two Engines Driving the Opportunity

Within Resource Efficiency, two structural themes have emerged with particular force this year.

The first is the energy efficiency imperative at the heart of artificial intelligence. The AI race, which began as a competition for raw computing power, has become an energy race. For the world’s largest technology companies, energy efficiency has moved from an environmental aspiration to a board-level operational priority.

Data centre electricity demand is projected to roughly double from approximately 485 TWh in 2025 to nearly 950 TWh by 2030, a scale of consumption that already rivals Germany’s annual electricity use⁴. Application-specific chip architectures, advanced networking infrastructure, semiconductor manufacturing equipment, and energy management platforms are all part of this story. The transition is already well underway.

The second engine is the modernisation and expansion of the electricity grid itself. AI-driven data centre growth, electrification of transport and heating, and reshoring of industrial capacity are placing enormous strain on aging grid infrastructure.

Global grid investment, which stood at around $300 billion annually in 2020, has already risen sharply and is forecast to total nearly $6 trillion globally between 2026 and 2035, with the United States alone absorbing roughly $1 trillion of that capital⁵. Capacity auction clearing prices in the largest US grid have surged to record highs, jumping nearly tenfold in two years⁶.

The companies enabling this physical buildout and modernisation — from engineering contractors laying transmission lines and integrating renewable connections, to cable and equipment manufacturers supplying high-voltage systems in acute global short supply, to regulated utilities deploying capital on both sides of the Atlantic — sit at the intersection of several major structural growth themes.

The grid is where the AI boom, the energy transition, and the reshoring of industry physically collide. Addressing that bottleneck is likely to be an enabler of growth.

Efficiency in Practice: Three Dimensions of the Opportunity

The breadth of Resource Efficiency, and the reason it would be a mistake to view it simply as a technology-sector bet, is illustrated by three companies we hold in the fund:

Schneider Electric^*, the French energy management and industrial automation leader, has enabled the avoidance of over 860 million tonnes of CO₂e cumulatively since 2018 through its EcoStruxure platform⁷, an open IoT architecture delivering energy savings of 10–30% in buildings and up to 25% in industrial operations. It is a compelling example of what it looks like to build an entire business model around helping the world use energy more intelligently.

Trane^* is a leading provider of climate control solutions that reduce energy consumption through advanced HVAC systems. A top player in North America and Europe⁸, Trane’s cooling solutions are already deployed by major tech clients⁹. Cooling alone accounts for between 30 and 40% of a data centre’s energy consumption — a tremendous opportunity for efficiency solutions¹⁰. Trane has committed to reducing customers’ carbon footprint by 1 Gt of CO₂ by 2030 (scope 3) ¹¹.

Cognex^* is a world leader in industrial machine vision (the cameras sensors, and deep learning software that inspect, identify and guide parts on production lines). By catching defects at a scale and speed no human workforce can match, Cognex directly reduces wasted materials, energy-intensive rework, and production inefficiency. The results are tangible: Ansomat, an automotive manufacturer in Belgium saw a 90% reduction in claims related to EV batteries after implementing Cognex’s In-Sight 3800 vision system¹². That this technology is now being adopted across electric vehicles, consumer electronics, and smart manufacturing underlines both its commercial momentum and its real-world environmental relevance.

Why This Matters Now

The events of 2026 have not changed our investment thesis. They have reinforced it.

Whether the challenge comes from geopolitical tensions, rising power demand from AI, or the electrification of transport and industry, the common denominator is increasing pressure on global energy systems. While new energy supply will remain essential, improving the efficiency of how energy is generated, transmitted and consumed can help reduce demand.

That is why resource efficiency remains at the heart of our investment approach. We believe the companies helping buildings, industries, data centres and power grids operate more efficiently are addressing a structural need that extends well beyond any single economic cycle.

As energy security, competitiveness and decarbonisation increasingly converge, demand for resource-efficient solutions is likely to remain strong for years to come.

Nordea’s Global Climate and Environment Strategy invests in companies providing the technologies, infrastructure and solutions designed to shape the transition to a more resource-efficient economy.