Buzz: Transfer to editor

Climate challenges will continue to evolve over the coming decades. Although some companies will avoid making firm commitments, instead leaving these challenges and opportunities to be solved by a future generation of CEOs, the most forward-thinking are already attempting to mitigate risks and protect the durability of their firm’s cash flows. 

This report highlights 21 climate leaders, assessed based on screening criteria that consider efforts towards emissions reductions, the existence of rigorous targets, and good climate governance.

Readers of this report will learn: 

• How Morningstar Sustainalytics distinguishes a company as a Climate Transition Leader.
• Which sector leaders are reducing their climate impact, and how they’re doing it.
• The challenges and opportunities Climate Transition Leaders within each sector. 

Key Insights

• According to the Responsible Investor Nature Survey 2025, 63% of institutional investors believe that their organizations do not have sufficient data to effectively measure nature-related risks, impacts, and dependencies.
• The financial industry is still in the early stages of developing a common taxonomy to identify activities that contribute to nature-positive outcomes, which is a major barrier to implementation.
• More than 85% of countries have not updated and aligned their National Biodiversity Strategies and Action Plans with the goals of the Global Biodiversity Framework.

In Black & White...

Nearly thirty years after the Greenbury report first railed against “fat cat” pay, CEO rewards at major listed companies are bigger than ever – and Elon Musk’s latest trillion-dollar package sets a new high-water mark.

After three decades of reform, we’ve got more process, more disclosure and more voting – but when it comes to fat cat pay, the real change has been far smaller than the numbers on the cheques.

Shareholders have more tools, more votes and more disclosure, but most pay deals still sail through, pay gaps remain huge, and the evidence that mega-awards improve long-term value is weak at best.

ESG-linked incentives may be the next frontier, but only if the targets are tough, transparent and genuinely tied to outcomes that matter.

Please see my full blogpost at the link below, addressing the following questions on this topic:

1. If we’re still talking about “fat cats”, are shareholders waving pay deals through?
2. Is “say on pay” meaningless, or do no-votes ever move the needle?
3. Have CEO–worker pay ratios narrowed?
4. Are remuneration committees still a “club” of executives marking each other’s homework?
5. Do very large CEO pay deals actually improve company value?
6. Does sustainability-linked pay deliver on ESG goals?

The global energy transition is progressing unevenly across sectors and regions, shaped by differences in technology readiness, financial capacity and policy strength. Using the MSCI Energy Transition Framework, this paper examines how these factors may influence corporate decarbonization over the next five to seven years.

Key findings:

• Technology readiness varies. Utilities, steel and transport have more viable decarbonization options than chemicals or oil and gas, where solutions remain costly or limited.
• Financial strength matters. Firms with stronger balance sheets are better positioned to invest in the transition, widening gaps within industries.
• Policy and institutions drive outcomes. Stronger policies and governance quality are linked to better emissions performance, particularly in developed EMEA markets, unlike Asia-Pacific where corporate targets play a larger role.

For investors, understanding how technology, finance and policy interact can help identify where transition risks are most material — and where low-carbon opportunities are emerging.

Key findings

• Data-center properties under construction globally have an estimated value of USD 550 billion, more than five times the value of assets investors have acquired since 2007, underscoring the market's exponential growth.
• While major operators and owners have set climate targets, data centers remain closely linked to rising carbon footprints. Ireland and the U.S. may face the steepest rise in emissions tied to properties under construction.
• A shift to data centers in property portfolios creates a dilemma for institutional investors who have committed to sustainability goals and may need to reconcile such commitments with the global digital transformation. 

"Solar- and hydropower plants can help mitigate climate change, but their ecological footprint depends heavily on where they are located. For investors aiming to balance lower emissions with biodiversity concerns, understanding where renewable assets overlap with sensitive ecosystems is key to managing risk and identifying more sustainable opportunities. 

Southeast Asia is home to both ecologically sensitive areas and rapidly expanding renewable capacity, but not all locations are equally affected. To highlight the spatial variation in risk, we mapped the location of solar- and hydropower plants against two nature-related spatial datasets...."

This is a crucial time for shareholder rights in the US financial system, which are under heavy attack from regulators in Texas and other states, in moves which, if successful, could neuter climate and sustainability proxy voting.

Hear:

• Nell talk about the origins of the business model of proxy voting agencies.
• How shareholders getting directors with climate change expertise nominated to the board of ExxonMobil precipitated the latest devastating attack on shareholder rights.
• How Nell defended proxy voting agencies in front of the US Congress.
• What the implications of the regulatory attack on shareholders rights could be?
• Nell’s favourite ‘corporate governance’ movies, her Transition Tapes music playlist, and career advice.

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• Access via Spotify
• Access via Apple

Definition of “sustainable investment” to be scrapped as Commission proposes new Transition, Integration and Sustainable fund categories.

Key takeaways

• A new three-category fund structure - Transition, Integration and Sustainable funds
• Entity-level PAI reporting to be eliminated
• Stricter exclusions for fossil-fuel expansion and coal generation
• Removal of formal definition of a sustainable investment

What are the proposed changes for SFDR?

There are now three new proposed product categories, to replace the existing Article 6, 8 and 9 structure :

...

Sets out progress toward Paris-aligned portfolio goals and net-zero commitments.

Explains adherence to Nordea Life & Pension’s engagement policy and summarises engagement outcomes.

Q2 2025 (quarter ended 30 June 2025, referenced alongside Oct-25 climate material).

Focuses on how LGIM uses its scale to drive “real, positive change”, with engagement case studies and stewardship metrics for the quarter.

Detailed coverage of 2025 proxy voting season.
Engagement case study with SSE on net-zero transition and affordability.
Thematic pieces on climate risk, insurance protection gap and “avoided emissions” research

Sustainability reporting from p70

"Our ninth Forever Chocolate progress report covering fiscal year 2024/25, highlights our achievements from the past year and delves deeper into our evolving strategy. It underlines our commitment to intensify our efforts by collaborating with customers, industry partners, and wider society, to drive real change on the ground. Simultaneously, we remain steadfast in our advocacy of policies to make sustainable chocolate the norm."