Buzz: Transfer to editor

"SI saw mixed performance in 2025, with energy transition continuing but market penetration plateauing

Climate physical risk and energy transition continue to have a significant impact on the global economy, and investors’ sustainability concerns are growing despite geopolitical headwinds; the market for sustainable investment products has been mostly flat over 3 years. Investment performance was mixed in 2025; most global SI equity indices outperformed the market, whilst SI fixed income indices were in line or behind the market."

Highlights"

• SI equities outperform, but with volatility and headwinds
• SI fixed income sees performance headwinds, but continued demand
• Energy transition continues to grow
• SI market penetration plateaus

Sustainability is increasingly proving to be a driver of corporate financial performance.

Recent analysis from WBCSD shows positive financial returns, with reported ROI ranging from 2x to 14x, especially in sectors like food and beverage.

Companies with strong sustainability practices often benefit from a lower cost of capital, while those that fail to act face tangible financial penalties, including EBITDA reductions of 5% to 25%.

In agrifood value chains, there is growing evidence of the linkage between climate, nature, and equity outcomes and management of material risks and opportunities that shape long-term value and resilience. 

In October 2025, WBCSD and Principles for Responsible Investment brought together a group of agrifood companies and investors to discuss how shared metrics can better support decision-making for both corporates and investors and drive more coordinated action across the sector. The article highlights the main insights from the dialogue.

In the evolving world of sustainable finance, investors are beginning to look beyond carbon. As the climate crisis intensifies, another equally urgent challenge is rising to the forefront — the loss of nature and biodiversity. The degradation of forests, oceans, and ecosystems is now recognized not only as an environmental concern but also as a financial risk threatening global growth and stability.

Biodiversity funds are emerging as powerful investment tools to tackle this challenge. By aligning profit with purpose, these funds are redefining sustainable investing and placing nature at the heart of long-term value creation.

Nature risks are fast becoming systemic risks that touch every part of the economy.

Like climate change, the loss of biodiversity and ecosystem services now poses a real threat to financial stability, business continuity, and food security.

Central banks, investors, and corporations are starting to catch up, albeit slowly.

ESG report detailing goals and progress for the fiscal year ending Dec 28, 2024 across environment, people and governance.

Includes metrics, programs and supporting disclosures/assurance resources via the Reporting Verifications hub.

Annual sustainability report (ESRS framework) supplementing the annual report, including the separate combined non‑financial report.

Covers environmental, social and governance topics, targets and progress across operations and value chain.

With the continued expansion of renewable energy, the electrification of transportation and heat,  and the rapid growth of data centers to support AI, global demand for electricity is surging. Electricity grids require significant investment to meet this skyrocketing demand. 

According to Bloomberg New Energy Finance, grid spending is expected to reach $577 billion annually by 2027, up from an estimated $479 billion in 2025.

Clean Edge’s 2026 Grid Market Map represents a selection of companies and organizations contributing to the grid across a range of sectors, from transmission & distribution manufacturers and data and software providers to grid enhancing technology innovators and energy storage players.

Europe is the fastest-warming continent, with climate change triggering more frequent and severe heatwaves, droughts and floods. This is driving up food prices, multiplying health risks, especially for the most vulnerable in society, and inflicting mounting damage to homes and livelihoods.

Banks have a vital part to play in tackling the climate crisis and helping protect our economy from the serious financial risks it creates. Yet, ShareAction’s new forensic analysis of Europe’s largest banks has found progress on climate has ground to a standstill, and in some cases, reversed.

A minority of banks are setting new targets to cut emissions in key sectors. This includes BPCE, ING, Intesa Sanpaolo, Standard Chartered, and UniCredit, which all expanded the scope of their decarbonisation targets to cover multiple new sectors between May 2024 and April 2025....

This monthly Regnan alert examines the “administrative commons” as a critical shared asset underpinning market stability. It argues that weakened public institutions and policy capture transfer systemic risk to diversified investors.

Framing institutional integrity as a material investment issue, it outlines why stewardship of resilient governance systems is essential for long-term value preservation.

AI presents a range of challenges and opportunities. As AI continues to evolve, it holds the potential to drive economic growth, improve quality of life, and address complex global challenges.

However, it comes with some growing concerns, particularly environmental and ethical. For example, the rapid expansion of AI increases energy consumption and carbon emissions, especially in data centres, raising sustainability challenges.

Ethically, AI systems can perpetuate bias, spread misinformation, and pose risks to privacy by collecting and analysing personal data, sometimes without adequate consent or transparency. Additionally, the adoption of AI may lead to job displacement and changes in employment patterns.

These challenges highlight the importance of robust governance, transparency, and measurable sustainability targets as AI technologies develop.

For the past several years, climate has dominated ESG agendas. Rightly so in our view, given that its physical and transition risks are reshaping portfolios and policy alike.

But in 2026, one issue has returned to the forefront with unmistakable urgency: governance, and more specifically, the health of democracy and the rule of law.

In 2019, the European Commission recognized the EU’s responsibility for around 10% of the global share of deforestation, highlighting the need for urgent and comprehensive regulation. In that document, the Commission first outlined its intention to address the EU’s impact on deforestation, citing its significant climate and biodiversity-related implications.

The EU Regulation on Deforestation-Free Products (EUDR), which entered into force in June 2023, aims to regulate key commodities linked to deforestation, specifically cattle, wood, cocoa, soy, palm oil, coffee, and rubber. Commodities that fall under the scope of the regulation must be demonstrably deforestation-free along their supply chain.

As of October 2025, the Commission has announced plans to delay the regulation for a second time, pushing its intended application date back a further year to December 2026, citing IT issues.

Because of its scope, the EUDR will have substantial implications for European businesses, especially from the consumer staples, paper & forest product, and automotive sectors. Reflecting this, companies and industry associations from these sectors have engaged actively on the EUDR, with industry associations taking more negative positions than companies.

Initial findings from new InfluenceMap research indicate that corporate communications around the term "just transition" are generally misaligned with international framework definitions from the UN's Intergovernmental Panel on Climate Change (IPCC) and International Labour Organization (ILO). This suggests that influential companies and industry groups may be risking both the energy transition and its just implementation.

Looking at climate-related communications by entities within the LobbyMap database from 2022 through 2024, InfluenceMap finds that the majority of engagement with the term is either vague or counter to the energy transition, such that:

• 69% of these communications only name-dropped or included a broad reference to a just transition;
• 11% of communications used just transition language to argue for an extended role for fossil fuels in the energy mix;
• 20% of communications involved some detailed engagement, with support for the steps required to meaningfully implement a just transition.

In 2025, new industry voices are chiming in on Europe's energy future—countering long-standing pro-fossil fuel advocacy by vested interests.

Between 2024 and 2025, in consultation responses on the EU Energy Security Framework, InfluenceMap finds an emerging contingent of industry voices from the renewable energy and utilities sector are emphasizing the importance of renewable-based electrification and the development of domestic renewables to strengthen the EU’s energy independence in line with scientific guidance from the Intergovernmental Panel on Climate Change (IPCC).

Largest asset managers increase their support for management at the corporate ballot box

"We analyzed proxy-voting records of 50 of the largest US managers of equity and allocation funds for companies in the Morningstar US Large-Mid Cap Index over the 2023, 2024, and 2025 proxy years.

Asset owners rely on proxy-voting records to assess alignment between their own objectives and the asset managers they appoint. This paper is a comprehensive review of US proxy-voting patterns that can help asset owners make that assessment."