Buzz: Transfer to editor

Key Takeaways
 
- With engagement oversight practices quickly evolving, a coordinated, cross‑team approach across ESG, investment, and client‑facing functions is essential.
- Purpose-built technology and external engagement support can help investors meet the demand for more structured, scalable tracking of engagement activities and outcomes.

Part One here

..What the Latest Data Says on Director Independence, Commitments and Diversity

• Key Takeaways
   
  Compared to 2024, there were slight increases in board independence (77.5%) and the presence of an independent chair (44.9%)
• In response to ongoing shareholder concern regarding the substantial increase and scope of directors’ responsibilities and oversight, the number of issuers implementing policies limiting director commitments continued to rise, with 75% of companies within the Russell 1000 having such policies.
• Although the overall number of women on Russell 3000 boards increased slightly in 2025 to 30.6%, the number of gender diverse, first year appointments at Russell 3000 companies decreased from 35% in 2024 to 28.4%.
• There was a significant decrease in the number of companies within the Russell 1000 that disclosed the racial/ethnic diversity of directors on either the aggregate board or individual director level (approximate 24% decrease from 2024).

The global financial system is undergoing a silent yet irreversible transformation. The current capital is no longer assessed by its ability to compound returns in a particular fashion, but by what it facilitates in the actual economy. Whether it is climate volatility and biodiversity loss, or social inequality and governance failures, systemic risks no longer exist independently of financial performance. The UN Sustainable Development Goals (SDGs) are at the heart of this change process.

Initially seen as aspirational goals by governments and NGOs, the development goals presented by the UN have become a strategic instrument for financial institutions. In 2026, banks, asset managers, insurers, and asset owners are likely to increasingly measure, report, and manage SDG impact across portfolios not as a reputational activity, but as an essential aspect of risk management, regulatory alignment, and long-term value creation.

This guide summarizes the 17 SDG goals, how SDGs’ sustainable development relates to financial decision-making, and how tools like SDG impact data, SDG impact ratings, SDG scores, and UNSDG impact scores are influencing the future of capital allocation.

This Regnan Alert analyses two developments with growing relevance for global investors. It assesses China’s accelerating green hydrogen leadership and the implications for Australia’s export ambitions and examines how rising affordability pressures are driving a shift in US utility rate decisions. Together, these themes highlight material risks and opportunities across evolving energy and infrastructure systems.

• Waste generation is expected to grow at double the rate of the global population
  by 2050
• Regulation and environmental awareness are catalysts for change
• Investment in waste management infrastructure and systems is essential – put simply ‘there is no sustainable economy without waste management’
• The waste sector offers an array of long-term secular growth opportunities....
  
  

• Water is essential for life on earth and is a precious, yet underappreciated and
  undervalued resource.
• Water is used in nearly all forms of economic activity including food
  production, industrial manufacturing, textiles, energy production and materials
  extraction – put simply ‘there is no economy without water’
• Water is intrinsically linked to many of the Sustainable Development Goals (SDGs)
• Water use continues to increase rapidly, driven by: population growth,
  urbanisation, rising wealth and.....

A major infrastructure upgrade by Brazil’s largest water utility is reshaping the future of sanitation and water quality in São Paulo. At the ETE Parque Novo Mundo wastewater facility, new high-efficiency treatment technology, rising capacity, and expanded service to underserved communities are strengthening the region’s environmental resilience while supporting long-term social and economic development.

..except for Scope 3 emissions, for which it is "comply-or-explain" from 2028

Having indicated in its regulatory initiatives grid that it would consult on disclosure requirements for UK listed companies in January 2026, the FCA has delivered – just. Previously expected in Q3/4 2025, the FCA has now published its long awaited consultation on changes to the Listing Rules to reflect the incoming UK Sustainability Reporting Standards (UK SRS) to replace existing TCFD based rules.  

Interested parties have until 20 March 2026 to provide their feedback to the FCA.

With the UK Government’s UK SRS yet to be finalised (currently due to be published in February 2026), the FCA’s position could still change, as the FCA intend for their final rules to reflect the final UK SRS. 

Given the Government’s consultations in June 2025 (see our previous blog posts here and here), the FCA also does not consider it appropriate at this stage to set out requirements for transition plans or for mandatory assurance – but this may be revisited at a later date. 

Opportunities for Decarbonisation in the Cement Sector

Cement underpins global infrastructure, yet it accounts for about 8% of global CO₂ emissions. Reducing those emissions is difficult because much of the CO₂ is released by the chemistry of cement production. This report shows what can realistically bring emissions down, and how policy and carbon pricing are reshaping the sector’s investment case.

... includes ...

• Cement Emissions in Context#
• Cement and Sustainable Development
• Carbon Emission Footprint Across the Cement Life Cycle
• Decarbonisation Levers in Detail
• How investors can accelerate decarbonisation
• Comparative Assessment of Leading Cement Players

... includes ...

• Workforce strategy
• Competing for top talent
• Upskilling and mobility
• Talent evolution
• Data navigator - for countries/regions
• Data navigator - for industries

... includes:

• Workers are embracing AI, but to build resilience they need a clear purpose
• Employees must understand the value of their work to maximise skills development
• Human connection builds trust for a responsible redesign of work

Includes a section on sustainability:

Investors continue to view sustainability as an important consideration when allocating to private markets. However, fewer now describe it as a primary driver of decision-making. This suggests a market in which sustainability has become more institutionalised and viewed less as a standalone theme.

SUMMARY

Households are already "taxed to the hilt" and public services are under pressure, so the transition cannot easily be financed mainly by fiscal measures. A just transition depends on private sector investors shifting from just transition commitments to scaled capital allocation-financing, so governments can protect the social contract rather than constantly asking workers to pay more. Governmental climate strategy will then be acting as an enabler (policy certainty, standards, and de-risking) and as a backstop for fairness (targeted support, skills, and place-based adjustment).

1) THE SUBSIDY PROBLEM: TAX BURDEN + SOCIAL SERVICE PRESSURE

• A typical £30,000 worker pays meaningful tax before "hidden" taxes: around £4,880 in Income Tax and employee NI using 2025-26 thresholds and rates.
• The burden people feel is larger because it includes council tax and consumption taxes. Council tax alone is highly visible; the England average Band D is £2,280 in 2025-26.
• VAT and duties are harder to see but are paid repeatedly through everyday spending and prices, producing the sense of being "taxed twice" (PAYE and then again at the till).
• The political implication: adding new, salient "green charges" on top of this landscape is likely to trigger backlash, especially when households already perceive living standards and services to be under strain (witness the recent tax per mile on EVS).

2) WHO FUNDS THE JUST TRANSITION IN PRACTICE

The transition is not mainly an "income tax-funded programme". It is a capital programme financed through multiple channels:

• Government: targeted spending (skills, transition support, regional adjustment) and catalytic tools (guarantees, policy-bank style crowd-in). But headroom is limited, and the transition also creates major "lost receipts" pressures as legacy tax bases decline (e.g. from fuel taxes).
• Devolved/regional funds: important for place-based justice but too small to carry whole-economy investment needs (e.g. Scottish transition fund).
• Regulation and standards: governments can require upgrades and shift markets, but costs still land on households/firms unless supported; this is where distributional design matters.
• Public finance institutions and market-building: policy banks and transition finance initiatives exist to reduce risk, lengthen tenor, and mobilise private capital at scale

3) WHY PRIVATE CAPITAL HAS TO DO MORE (AND WHAT THAT MEANS FOR INVESTORS)

• Net zero delivery requires large annual investment by the early 2030s; the transition is fundamentally an investment programme, not only a public-spend programme.
• Governments are explicit that public funding is a minority share; the objective is to mobilise private capital into policy-backed pipelines.
• "Just transition" commitments imply distributional constraints: investors cannot credibly claim to support a just transition while expecting the median worker to fund it through higher taxes or regressive bill impacts.
• Pension funds and long-term asset owners are central: they represent workers whose tax capacity is constrained. That strengthens (not weakens) the investment case for transition assets that protect long-run prosperity and manage climate risk.

4) WHAT "PUT YOUR MONEY WHERE YOUR MOUTH IS" LOOKS LIKE

Investors that take just transition seriously could:

• Reallocate capital toward credible transition pathways (not only already-green assets), including grids, clean power, industrial decarbonisation, retrofit finance, heat infrastructure, and supply chains.
• Accept the transition risk profile: longer tenors, contracted/regulated revenues, and policy-linked risk are often part of bankable transition assets.
• Engage for credibility: require financed emissions alignment, capex plans, and labour/place strategies; do not reward targets without funding.
• Co-invest and crowd in: show up alongside public institutions designed to mobilise private capital.
• Treat fairness as investable: retrofit, resilience, and affordability are where social consent is won or lost.

"Why inconsistent asset retirement obligation disclosures leave investors exposed to hidden risk

Oil and gas companies in the UK, Canada and Australia are failing to fully disclose the costs of decommissioning their fossil-fuel-related infrastructure, leaving investors with incomplete and non-comparable information. Our new report, Asset Retirement Obligations: What Lies Beneath? reveals significant variation in the quality and completeness of reporting information, despite companies in all three jurisdictions using the same international accounting standards.

Our report makes the case for improving transparency and comparability in how oil and gas companies in the UK, Canada, and Australia report information about obligations to decommission their fossil fuel infrastructure. This includes information underlying the balance sheet liability, including estimated costs and timing. Currently, gaps in reporting expose investors to financial and regulatory risks.

Key findings

Overall quality of ARO disclosures is poor and seems to vary depending on jurisdiction

Carbon Tracker assessed 38 oil and gas companies’ financial statements using 15 disclosure metrics. While each metric was achievable – with at least one company providing some of the relevant information – overall disclosure is poor, leaving investors with incomplete and non-comparable information.

Recommendations

In 2023, Carbon Tracker estimated that decommissioning existing oil and gas infrastructure in the U.S. alone would cost over $1.2 trillion, and that total global costs could be four times as large. As the energy transition gathers pace, the resources to pay for clean-up may be needed sooner than planned, while production revenue may not be available as a source to cover these costs.

More regulatory scrutiny is urgently needed to improve transparency about how oil and gas companies report decommissioning and clean up obligations (and the related liabilities) in their accounts.

The report recommends that financial market regulators:

• Prioritise transparency of decommissioning liabilities in supervision and oversight
• Ensure investors can understand the scale, timing of, and impact of uncertainties on asset retirement obligations
• Encourage companies to adopt consistent, comprehensive reporting practices"