Buzz: Transfer to editor

Financial inclusion can reduce a provider’s concentration risks, improve efficiency and profitability: Banks and insurance companies can diversify their asset and liabilities bases, limiting concentration risks, often restraining revenue and profit volatility.

Financial inclusion’s reliance on digital platforms can lead to efficiency benefits, supporting stronger profitability. Financial inclusion also reduces income and gender inequality. Main risks include higher credit and cybersecurity related risks.

The GX transition programme, what it means for investors and how sustainability data and transition indices can help to navigate it.

• Japan’s GX (green transformation) strategy is a broad, ambitious and well-financed transition plan that is designed to cut carbon emissions, improve energy efficiency and boost green innovation.
• Under the plan, ¥3.7 trillion of government transition bonds have already been issued and mandatory emissions trading will start in 2026.
• Carbon intensity, transition efforts and green revenues exposure will become key attributes for assessing the economic potential of Japanese companies.
• LSEG can help with comprehensive SI data covering carbon intensity, TPI climate transition metrics and green revenues. FTSE Russell offers multiple Japanese climate transition equity indices utilising these metrics to help investors allocate capital.

With development financing needs outpacing available resources, attracting private capital into social and environmental projects in risky markets (e.g., emerging markets) is vital. We believe that Blended Finance (BF) offers a strategic solution.

Specifically, this investment approach involves the public sector leveraging private money to finance projects focused on achieving sustainable development goals (SDGs) and addressing climate change. Institutional investors are enticed to participate in these projects, which may initially appear too risky for them.

BF is widely employed by public sector sponsors, such as development finance institutions (DFIs) and multilateral development banks (MDBs), whose mandates are to serve public interests (e.g., reducing poverty). 

Mark Carney’s “tragedy of the horizon” speech in September 2015 was a clarion call, warning of the risks of climate change to financial stability.

Any fair evaluation of the speech should assess what he got right and what he and the resulting agenda may (with the obvious benefit of hindsight) have missed. It should also examine what the financial system, as a whole, got right or wrong.

But an analysis deserves an exam question: what can be done to “break” the horizon, as Carney put it, or at least to bring it closer to the present? Leveraging Carbon Tracker’s decade-plus of dialogue with investors, we wanted to mark this anniversary by considering how finance and policy have responded to this existential challenge.

Location isn’t just geography, it’s financial risk exposed. The location of companies’ assets affects returns and volatility. For investors, location can magnify portfolio drawdowns when hazards strike investee companies’ facilities. Hazards striking key production sites, data centers or supply hubs can amplify risk through both direct asset damage and costly business interruptions. Yet these risk exposures are often invisible in traditional portfolio analyses.

Key points

• Artificial Intelligence (AI) will be transformative across many industries but comes with the 
  risk of unintended consequences such as bias, discrimination, breaches of privacy and 
  job losses.
• Weak AI governance may expose companies to significant legal, financial and reputational risks.
• Global AI developers are advancing their governance frameworks with responsible AI 
  considerations, while many ASX companies are very early in that journey.
• Responsible AI must go beyond ethics to include other issues such as energy, climate 
  and environmental, and human rights.
• Outside of Australia, other countries such as China have more progressive policies that 
  encourage companies to incorporate responsible AI principals, as well as support data 
  centre development that is more energy efficient. 

Environmental, social, and governance (ESG) reporting has become a cornerstone of corporate transparency and accountability, especially within high emission sectors such as oil and gas. However, the traditional methods of extracting meaningful insights from ESG data are time-consuming and are in general processed manually. 

In this study, the authors introduce a Retrieval-Augmented Generation (RAG) pipeline, which automates the extraction and evaluation of information across large volumes of general and sustainable reporting, enabling analysts to efficiently process and synthesize data from multiple years and companies. The authors propose evaluation metrics that mimick human assessment. 

"We see corporate governance in China entering a new era. China’s corporate governance reform, led by the State Council, stands out in Asia for its top-down approach and coordination with other agencies. Wide-ranging reforms are bolstering the governance of listed companies and institutional investors are being empowered to be active asset owners.  

David Choa, Head of the Greater China Equities Team, Jane Ho, Head of Stewardship APAC, and Sifan Wu, Stewardship Analyst, discuss how these developments fit with our investment approach."

In brief

• Rising geopolitical tensions and a renewed focus on national security have redirected capital toward tangible defense capabilities, particularly those powered by emerging technologies like drones and advanced propulsion systems.
• Defense stocks have historically been resilient, underpinned by long-term contracts and stable, government-backed cash flows. Increasingly, the sector is also being shaped by broader themes such as climate policy and industrial innovation.
• While many investors have traditionally excluded defense, a more nuanced approach is gaining traction—one that balances ethical considerations with the sector’s evolving strategic role and governments’ increased defense spending.
• Engagement, rather than exclusion, may offer a more constructive path forward.
  As with any capital cycle, this shift will create both opportunities and risks. 

While some progress has been made in assessing and integrating climate risks – both physical and transition - into our economies, biodiversity risks remain far less addressed, in part because of their complexity. At Candriam, as a responsible investor, our efforts to understand and assess biodiversity risks started a few years ago and resulted in the release of a proprietary model and the publication of our Biodiversity Strategy – a process to integrate biodiversity risks in our investment strategies.

But one piece was still missing: financial quantification – in other terms, how to quantify a company’s biodiversity impact in financial terms, and take another step toward a more accurate and thorough sustainability analysis of companies in investors’ portfolios?

Biodiversity Report 2025

Sustainability Report 2024

ESG data sheet

Ahead of COP30 in Belém, Brazil (10–21 November 2025)

Each round of the UN climate talks is greeted with a chorus of cynicism in some quarters and understandably so. While the world burns Nero fiddles; carbon reduction targets look soft and distant, late night texts get watered down and by the time the gavel falls many parties walk away unhappy. 

But dismissing COP as a talk shop full of hot air to an extent ignores what it does accomplish, namely, set a shared language for policy, finance and corporate planning. Those steps alone are not sufficient, but they do help to frame an international carbon agenda.

Without COP, there would be no Paris Agreement architecture, no common temperature goal, no five‑year update cycle, no global report card. The first Global Stocktake concluded at COP28 (Dubai, December 2023) called on countries to transition away from fossil fuels and to triple renewable power and double energy efficiency by 2030, this represented a multilateral signal to company boards and investors on the direction of travel. And it could be argued helped usher in, albeit indirectly, regulatory moves in the EU and UK to avoid greenwashing by so-called climate funds.

Finance is moving too, if unevenly. COP28 also operationalised a Loss and Damage fund to channel resources to the most climate‑vulnerable economies which serves as a precedent for public‑finance plumbing that lowers risk and encourages private capital.

Brazil, the host of COP30, shows why more scrutiny of such agreements matters and makes a difference. Official data indicate Amazon deforestation fell about 11% in the 12 months to July 2025, reaching the lowest level in roughly a decade, even as fires raged during an extreme drought. 

So how then is deforestation policed? Brazil’s long‑running Action Plan (PPCDAm) coordinates ministries and states; IBAMA, the federal environment agency, uses real‑time INPE satellite alerts (DETER/PRODES) to target inspections, impose fines, embargo land and seize equipment. 

Furthermore, the Amazon Fund, reactivated in 2023 with fresh Norwegian and German support finances monitoring and enforcement. Outside Brazil, the EU Deforestation Regulation (EUDR) compels importers of cattle, soy, cocoa, coffee, palm, rubber and wood to prove ‘deforestation‑free’ supply chains, adding external pressure on producers and traders.

On the question of whether there should be a stronger focus on ‘pure plays’ to address climate change, the sector is still capital‑constrained relative to what 1.5°C requires. The IEA estimates total clean‑energy investment at roughly US$2.2 trillion in 2025 against needs of ~US$4.5 trillion annually by 2030. This is a gap that is hard for companies and investors to close without policy clarity on grids, permitting, carbon markets and cross‑border finance, but this is also the terrain COP helps to coordinate.

For mainstream exposure to ‘pure‑green’ revenues, investors often use diversified clean‑energy ETFs that align with the COP28 tripling‑renewables objective, e.g.: iShares Global Clean Energy (ICLN), Invesco Solar (TAN), First Trust Nasdaq Clean Edge Green Energy (QCLN), ALPS Clean Energy (ACES), and VanEck Low Carbon Energy (SMOG). 

These are examples of liquid vehicles that channel capital toward renewable equipment, developers and enablers. The more credible the policy signals from COP30, the lower the perceived risk and the cheaper the cost of capital for these ‘pure plays’. 

COP sets the rules and reference points that investment committees, development banks and corporates actually use. 

Some tensions cannot be ignored, however, these include:

• Brazil’s push to explore the Equatorial Margin (via Petrobras) which sits uneasily with COP30’s decarbonisation aims
• Civil society pointing to a likely record fossil‑fuel lobbyist presence at recent COPs as undermining ambition and key global leaders not attending
• Crime undermining forest protection efforts and the Tropical Forest Fund being under-funded
• UNEP noting that emissions cuts of ~42% by 2030 are needed to keep 1.5°C viable; failure would put the world on ~2.6–3.1°C path, such cuts won’t be agreed on
• The IPCC finding that future emissions driven by population growth, urban expansion and rising demand for carbon intensive goods and services mean consumption‑based CO₂ has surged

The latter point in particular may render any agreements at COP fairly meaningless, there is zero possibly to reduce population growth and the spiraling growth in mass consumption…a look at sales figures for SUVs reinforces that point, as do forest encroachment statistics from burgeoning populations in Africa and Asia. Many mouths to feed and homes needed.

In conclusion, it seems COP will continue to give a steer on policy that investors and corporates can follow and this is a better situation than a world without COP. But it is still not going to be enough to stop the twin global human induced disasters of climate change and biodiversity loss. 

Bond markets threatening to starve governments of capital might be the only way to force change before it’s too late, read more on that here. COP can only ever bring about incremental change despite good intentions. 

The Global Investor Commission on Mining 2030 is pleased to release its 10-Year Vision and Recommendations for public consultation. The Vision and Recommendations are the product of extensive deliberations by seven thematic Working Groups, the Commission itself, and broad multi-stakeholder engagement. In addition to the overarching Vision and Recommendations, the Commission has also drafted Investor Expectations for mining companies, mineral value chain companies, and for stakeholder engagement and benefit sharing.

As we move into the next phase of our work, we are seeking feedback from all stakeholders — including investors, mining companies, civil society, governments, and community representatives — on (a) the priorities for action, (b) the role that individual stakeholders might play in turning the Commission’s Vision and Recommendations into reality.

The Commission is inviting stakeholders to comment and share feedback on its outputs. Stakeholders can share their feedback directly with the Commission secretariat from November 2025 to early February 2026.

Please refer to the consultation page.

To contact the Secretariat, or if you have any questions about the consultation please contact us.

Navigating the Global Climate-Focused Fund Landscape

Climate change is one of the top systemic risks for investment portfolios. At the same time, more investors are seeking to capitalize on opportunities and invest in companies that develop innovative solutions to mitigate climate change or adapt to it.

In fact, climate-related funds now account for almost 20% of the global ESG and sustainable funds market, representing a wide range of strategies – from decarbonizing portfolios to investing in climate-related solutions..

This new edition of Investing in Times of Climate Change helps climate-focused investors navigate the expanding array of strategies available to them. It provides an update on the rapidly evolving global landscape of climate funds, which are subdivided into five categories: low carbon, climate transition, green bond, climate solutions, and clean energy/tech.

COP30 host Brazil has just pledged to quadruple alternative fuel use by 2035, joining a growing list of players that put alternative fuels at the heart of their decarbonisation plans. 

But not all alternative fuels are created equal. Our latest report finds that, at least in aviation, replacing conventional jet fuel with a non-fossil alternative may prove problematic not only financially but also environmentally. 

Fuel Disclosure shows that alternative jet fuels, often referred to as sustainable aviation fuels or SAF, are unlikely to deliver meaningful emission cuts before 2030 unlikely to deliver meaningful emissions cuts before 2030, according to our latest report Fuel Disclosure. Even if every existing, under-development and announced project operated at full capacity, alternative jet fuel would supply only around 5% of global jet fuel demand and meet less than half of the expected growth in total jet fuel consumption.