Buzz: Transfer to editor

In the past year the pace of the progression of the energy transition, measured by the indicators we track, has been largely mixed, with acceleration in some areas such as global electric vehicle technology and infrastructure offset by decelerating factors such as U.S. federal policy changes. In the real economy global emissions continue to increase.

We see investor’s perception of the low-carbon transition growing overly negative relative to what the indicators and related data would suggest, creating a robust landscape of opportunities for institutional investors.

Editor's Word: Discipline, Transition & Impact in Private Credit

Private credit has quietly become one of the most influential forces in global finance. With nearly US$2 trillion raised since 2011, it now funds the backbone of economic growth: the small and mid-sized companies unseen by public markets and underserved by banks. As capital searches for resilient returns and investors seek to align portfolios with the transition to a low-carbon economy, private debt sits at the centre of an urgent and fascinating tension: how do we reward performance while reshaping the real economy?

This publication explores that question through the lens of those deploying capital on the ground. The story is not one of glossy sustainability labels; it is about structuring covenants that change behaviour, about designing incentives that push borrowers to reduce risk and environmental harm, and about the messy practicality of gathering ESG data from companies that have never reported it before. Lenders are learning that sustainability isn’t just an ethical overlay; it is a tool for protecting capital, improving creditworthiness, and unlocking new markets.

The conversations captured here reveal a market in transition: from hype to discipline. Investors have moved past the ESG bubble toward a more pragmatic understanding of what matters, and how to deliver it.  They show how contract terms can prevent deforestation in Brazil, how financing can upgrade local infrastructure in Indonesia, and how borrowers can be supported rather than punished as they build new capabilities.

Yet major challenges remain: opaque information, shifting regulation, geopolitical instability and a persistent bias toward investing close to home. Blended finance may help unlock emerging-market opportunity, but only if public and private players learn to trust one another.  Private credit will continue to grow. The question is whether it becomes a powerful lever for sustainability, or simply more capital without consequence. The answer lies in what investors choose to demand next.

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Consolidated Statement of Non-Financial Information and Sustainability Information (SNFI) FY2025

Sets out firm’s B Corp and Benefit Corporation commitments, ESG integration in fixed income strategies and culture; complemented by a 2024 Annual Benefit Report for legal benefit-corp disclosures.

Describes governance, ESG-integrated fixed-income process and engagement case studies across bond issuers

Second annual Sustainable Investment Review; consolidates information on screening, exclusions, engagement and voting, and references quarterly Sustainable Investment Reviews and thematic climate/nature reports.

ESG report and separate ‘highlights’ publication aligned with ESRS.

Privately held

Latest ESG report, with PDF filed to stock exchanges in early Dec 2025.

Real estate and hotels company

Tokyo Stock Exchange, Prime Market (securities code: 8923)
Singapore Exchange, Main Board (securities code: S2D)

"The report details our commitment to responsible business practices in accordance
with internationally recognized standards, including the GRI (Global Reporting Initiative) and
SASB (Sustainability Accounting Standards Board). It also demonstrates our alignment with
the United Nations Sustainable Development Goals (2030), particularly those relevant to our
industry and operations. For the third consecutive year, an Independent Assurance Statement
has been obtained, confirming the accuracy, reliability, and objectivity of the information
presented."

Seanergy Maritime Holdings Corp. is a prominent pure-play Capesize shipping company listed in the U.S. capital markets. Nasdaq - SHIP

Against the backdrop of WBCSD’s 30th Anniversary, this paper examines if transformative business actions taken by executives are now receiving clearer signals from capital markets.

Key Takeaways

• Capital markets are starting to move – emissions profiles and credible transition plans are influencing borrowing costs in both bond markets (greenium) and bank lending spreads.
• Offense + defense improves EBITDA – growth can be accelerated through increased productivity, operational efficiency, and effective risk management (e.g., physical, policy).
• Markets reward credibility – publish milestones that investors and lenders can price over time; tie sustainability metrics to capex, incentives, and strategy.
• Sustainable financing structures may be advantageous – sustainability-linked instruments can diversify investor base and potentially lower pricing.
• Equity re-ratings are earned by delivering financial fundamentals – cost, revenue mix, resilience, and discipline drive valuation, not generic ESG claims.
• Doing nothing is an active risk choice – physical risks and policy shifts compound, increasing spreads and stranded-asset concerns.

A Guide to Understanding and Strengthening Investor Practice

Key Findings:

Systems stewardship is growing, but implementation varies and faces barriers.

Eighty-five per cent of surveyed investors incorporate systems thinking into stewardship.  They identified key system-level risks — climate change, human rights, biodiversity loss, resource depletion and social inequality — as material threats to long-term performance requiring coordinated, systemic action. Investors recognise that safeguarding beta-level returns helps protect the financial system and market.

Collaboration remains the dominant lever.

Ninety per cent of investors engage in alliances such as Climate Action (CA) 100+.  Policy advocacy is common across national and state governments, regulators and standard-setters, with a focus on climate policy, sustainability disclosures and sectoral transition pathways. However, there is a limit to depth and frequency.

Sector and value chain engagement is emerging.

While less common, initiatives such as the Investor Mining and Tailings Safety Initiative (IMTSI) and the Steel Purchaser Framework show the potential for collective action to shift industry systems.

Asset owner and asset manager alignment is strengthening.

Asset owners are increasingly engaging managers on systems stewardship, though formal accountability remains limited.

Company engagement is evolving.

Systems stewardship expands the lens to include lobbying practices, industry standards and collaborative tools to measure impact.

The report identifies six priorities to accelerate progress ... READ MORE VIA DOWNLOAD

Introduction

Many investors now have policies and strategies to address global issues of concern such as climate change, biodiversity loss, poverty and healthcare. But is the onus on investors to solve these problems? Are they aiding and abetting them through their investments in corporations? Or are states, companies and the general population largely to blame for societal and planetary ills? If the latter three actors, then maybe we should not have such high expectations for investors to direct their capital sustainably.

Looking at the numbers, however, all four actors are deeply implicated in most global problems but in different ways and investors do share part of the burden. In short:

·       States: design the rules of the game (laws, taxes, subsidies, infrastructure).

·       Listed companies: concentrate production-side and consumption impacts in a relatively small number of enterprises, owned by investors.

·       General population: drive a big share of impacts through consumption choices and pressures such as poverty and poor education.

The issue of climate provides the clearest example of the interplay between these various actors. All four constituents take responsibility:

Producers (supply-side) and their owners:

The ‘Carbon Majors’ report traces ~72% of historical fossil-fuel and cement CO₂ to just 122 producers (investor-owned, state-owned and state entities). Recent analysis of 2023 data shows just 36 fossil fuel & cement companies account for over half of global emissions, with state-owned firms dominating that list.

Consumers (demand-side):

Multiple studies estimate 60–72% of global GHG emissions are driven by household consumption, once you include emissions embedded in goods and services.

States (policy-side):

Set the policy agenda, which can be strongly or weakly supportive of reducing emissions. So if you allocate responsibility by who “digs and burns” fossil fuels, you get a few hundred companies + the investors and/or states that own or regulate them.  If you allocate it by who buys goods and services, you get households and the lifestyles/patterns that states and firms enable. Both perspectives are therefore true but according to different lenses and that basic ambiguity repeats across most issues.

A responsibility matrix

Below is a basic “responsibility matrix” that maps this in a structured (high ‘H’ to medium ‘M’) way across a range of sustainability themes that many investors are concerned about.

Big picture patterns from the responsibility matrix

The general population column is not “absolving” people, but it recognises that consumers mostly choose from the menu they’re offered, under the rules states set and the systems companies build.

Climate and health are the clearest “investor-heavy” responsibilities. For climate, a relatively small number of carbon-intensive companies and their investors decide whether to keep expanding fossil fuel supply or to shift capex into low-carbon systems. For obesity, tobacco, alcohol and ultra-processed food, corporate actors engineer products, pricing and marketing in ways that drive population-level harm.  Investors ultimately own these companies and help determine capital allocation, strategy, and governance.  Thus, investor responsibility is also structurally very high.

States are structurally indispensable for poverty, inequality and enforcement. Redistribution, education, social protection and rule-of-law are fundamentally public functions. Companies and their owners can support or undermine this (via wages, tax practices, lobbying), but they can’t replace it.

Land use, biodiversity, deforestation and oceans are three-way problems. Here the pattern is a triangle. States control land and fishing rights, enforcement and infrastructure (roads into forests, ports, etc.). Companies/investors shape global commodity systems (beef, soy, palm, fish, timber, mining) and supply chains. Consumers drive demand for cheap meat, cheap palm-oil-rich products and cheap fish.

Plastic and waste show how shared responsibility really works. Policy can ban, tax or regulate certain plastics. Companies choose packaging formats and business models and could internalise more end-of-life costs. Households do the buying, binning and littering. It’s an example where investee companies cannot credibly claim “we just supply what people demand”, because they also design the packaging and the waste systems around it. Plastic pollution results from both corporate product/packaging design and mass consumption habits. Individuals play a significant role, but companies control upstream choices that lock in waste generation. 

Animal welfare highlights a moral responsibility, not just carbon or GDP related. Industrial livestock systems are very profitable, investor-owned and highly responsive to capital. States set minimum welfare standards, but companies design the actual conditions animals live in and investors benefit from that.

Why investors ultimately hold high responsibility

Consumers tend to choose from what companies produce. And investors own major corporations.

1. Investors own the menu offered by corporates; consumers choose from it - If all cars available were low‑carbon, personal transport emissions would plummet regardless of individual “choices.”

2. Investors have leverage even when states are weak - Companies can be encouraged (engagement, capital allocation) to adopt higher global standards even when national enforcement is poor.

3. Responsibility should roughly follow power and profit - Where a small set of profitable firms control system design, production and consumption trends, their owners carry disproportionate responsibility.

First published in 2012, the Global Sustainable Competitiveness Index (GSCI) measures country-level performance based on over 250 quantitative indicators, derived from international organisations such as the World Bank, various UN agencies, the IMF.

The GSCI serves as inclusive alternative to the GDP, to assess country-specific and issue-specific risks for operators and investors, and to verify development progress for government agencies.

The GSCI is officially used by four national governments to benchmark their progress on the path to sustainable and competitive development.

What our global asset owner survey says about sustainable investment 

To paraphrase Mark Twain, reports of the decline of sustainable investment are greatly exaggerated. Despite shifting political views on the climate transition and a deregulatory push in Europe and the US, our latest annual survey finds continuing and consistent adoption of sustainable investment by asset owners around the world. 

Indeed, our survey – which polled the views of 415 pension funds – found growing concern among investors about climate risk and an ongoing focus on diversity equity and inclusion. 

But it also revealed a shift from principles to pragmatism, and more hard-headed attitudes among asset owners towards sustainable investment in practice. This, we believe, offers a road map to how the sustainable investment industry builds from its current plateau. 

Resilience and Adaptation is the theme of our 2025 Impact Report. To foster more resilient communities and systems, we are actively adapting to the shifting landscape of sustainable and impact investing. This evolution allows us to better serve our clients and meet the volatile moment we face today.