3.2 Transition readiness Transition readiness key takeaways BOX 6 Readiness as the driver of progress: Transition readiness remained the main engine of ETI progress, growing 12.5% since 2016 (versus 3.3% for system performance). Broad gains, uneven foundations: Regulation, infrastructure and investment advanced most, but education and innovation continued to act as bottlenecks limiting the depth of readiness.Momentum under pressure: Progress slowed to +0.8% in 2025 as macroeconomic, trade and fiscal pressures strained finance and innovation enablers.A clear differentiator: Readiness increasingly separates leaders from laggards. Advanced economies lead, and emerging Asia is catching up via investment and infrastructure. Source: World Economic Forum. The ETI’s transition readiness sub-index is rooted in various factors that are important for enabling the transition, including the stability of the policy environment, the level of political commitment, the investment climate, access to capital, consumer engagement, and the development and adoption of new technologies. These elements collectively shape a country’s ability to steer its energy transition effectively. While some factors, such as skills or the quality of transport infrastructure, extend beyond the energy system, they significantly influence the trajectory and success of the energy transition and are explicitly acknowledged as part of the sub-index. Transition readiness over the past 10 years Over the past decade, transition readiness has been the main engine of ETI progress. Starting from a lower base (41.8 in 2016), it rose by 12.5% to reach 47.1 in 2025, reflecting steady gains in regulation, infrastructure and institutional maturity. In contrast, system performance began at a higher baseline (61.5 in 2016) and grew more modestly to 63.5 (+3.3%), due to the slower evolution of mature dimensions like equity, security and sustainability. Transition readiness is now emerging as the key foundation for future success in energy systems. Some key takeaways include: –Regulation and political commitment saw the sharpest increase (+19.6%), a sign of strengthening policy frameworks and long-term planning in many countries. –Infrastructure steadily improved by 15.4%, highlighting ongoing efforts to modernize grids and energy systems. –Education and human capital experienced a more gradual rise (+6.8%), though with some volatility in recent years, pointing to structural constraints in workforce development (particularly aligning talent pipelines with emerging clean energy and digital skills demands). –Innovation showed the least improvement over the past decade (+3.4%). While some countries recorded isolated gains in environment- related research and development (R&D) and technology diffusion, the overall trend highlights the urgency of establishing more targeted and scaled innovation policies to accelerate transition outcomes. –Finance and investments showed late but notable improvement (+10.3%), indicating growing clean energy capital flows. Yet, investment levels still lagged behind what’s required to meet future system needs, suggesting that risk mitigation and bankability are still barriers in many markets. Transition readiness has been the main engine of ETI progress. Starting from a lower base (41.8 in 2016), it rose by 12.5% to reach 47.1 in 2025. 32 Fostering Effective Energy Transition 2025