Transition as a Competitive Strategy

Adolfo Osorio, Head of Client Coverage & Sustainability, CIB Mexico

How transition finance and the global reallocation of capital are reshaping corporate investment, transformation, and growth decisions.

Businesses are navigating a period of profound transformation driven by technological advances, evolving regulations, changing market expectations, and a growing need to strengthen operational resilience.

Against this backdrop, many of the decisions that will shape future competitiveness revolve around where to invest, how to modernize operations, and how to finance that transformation.

Sustainability has been part of the corporate agenda for some time. What has changed is the role it now plays in strategic decision-making. Increasingly, it is influencing decisions related to asset modernization, operational efficiency, access to capital, competitiveness, and long-term growth.

According to the International Energy Agency (IEA), investment in clean energy technologies and infrastructure is expected to reach approximately USD 2.2 trillion in 2025*—roughly twice the amount projected for oil, natural gas, and coal. Beyond the numbers, the trend reflects a profound global reallocation of capital and sends a clear signal about where long-term investment is heading.

Why transition finance is gaining momentum

It is within this context that transition finance has emerged as an increasingly important component of the global financial agenda. Its purpose is to mobilize capital toward projects and companies undertaking transformation efforts that can strengthen competitiveness while accelerating the transition to a lower-carbon economy.

This is far from an isolated trend. In recent years, international organizations such as the IEA, the Glasgow Financial Alliance for Net Zero (GFANZ), and market associations including the International Capital Market Association (ICMA) have converged around a fundamental idea: achieving global decarbonization goals will require mobilizing unprecedented amounts of capital toward sectors responsible for a significant share of global emissions—sectors whose transformation will be essential to building a more resilient and competitive economy.

The scale of the challenge helps explain why transition finance has become a central topic on the global agenda. Beyond commitments and targets, the real question is how the capital needed to support this transformation will be mobilized.

A new framework for investment decisions

In the early stages of sustainable finance, much of the focus was placed on activities that were inherently considered green, such as renewable energy, clean mobility, and energy efficiency. As the climate agenda evolved, however, it became increasingly clear that achieving global decarbonization goals would also depend on the transformation of carbon-intensive sectors that remain essential to the global economy.

Industries such as steel, cement, mining, aviation, transportation, and energy face some of the greatest decarbonization challenges, while continuing to serve as the backbone of economic growth, infrastructure, and development.

It was in this context that transition finance began to gain momentum.

Rather than representing a new financial category, it reflects an evolution in the way sustainability is understood. It acknowledges that the transition cannot be achieved solely by financing companies that are already sustainable. It also requires supporting those facing more complex transformation processes, but with significant potential to deliver meaningful impact.

Rethinking investment decisions

As a result, the criteria used to assess progress toward a more sustainable economy have also evolved. For many years, the central question was which activities could be classified as green. Today, investors, financial institutions, and international organizations are placing increasing emphasis on the quality and credibility of corporate transition plans.

The distinction may appear subtle, but its implications are profound.

From a business perspective, the challenge extends well beyond sustainability objectives. Increasingly, it is tied to decisions about growth, competitiveness, resilience, and access to capital.

The future competitiveness of many organizations will depend on their ability to demonstrate how they plan to modernize their operations, respond to evolving market expectations, and manage the risks and opportunities associated with an economy in transition.

For executive leadership teams and finance professionals, this means incorporating new variables into investment decisions. Asset modernization, energy efficiency, process electrification, technological innovation, emissions reduction, and stronger operational resilience are no longer viewed solely through the lens of sustainability—they have become strategic business priorities.

What this means for mexican companies

The transition is no longer merely a long-term aspiration. Increasingly, investors, financial institutions, customers, and global supply chains are assessing companies' ability to demonstrate credible, measurable transition plans aligned with the demands of a rapidly evolving economic landscape.

For Mexico, this reality is particularly significant. The country's productive base is closely tied to sectors that will play a pivotal role in the global transition while facing growing expectations from customers, investors, and international markets. Access to capital that supports these transformation efforts could become a key differentiator in maintaining competitiveness over the coming years.

Financing the transition

Against this backdrop, perhaps the greatest contribution of transition finance is that it provides a new framework for understanding how companies can accelerate their transformation in an increasingly demanding environment.

The transition is not only about financing the industries of the future. It is also about driving the transformation of the industries that underpin today's economy.

At BBVA, we see a unique opportunity to support our clients throughout this process—not only by providing access to financing, but also by helping identify opportunities, develop tailored transition frameworks, structure financing solutions aligned with their transformation objectives, and mobilize the capital needed to bring those plans to life.

The transition to a lower-carbon economy will require new technologies, new investment, and new financial tools. Transition finance is one of them.

And in a world where adaptability is becoming a prerequisite for competitiveness, access to the capital needed to accelerate that transformation could prove to be one of the defining factors of corporate leadership in the decade ahead.

Source: International Energy Agency (IEA), World Energy Investment 2025 – Executive Summary. The report estimates approximately USD 2.2 trillion in investment in clean energy technologies and infrastructure in 2025.