The US Sustainable Investment Forum (US SIF) is looking to glean insights from asset owners and managers for its upcoming report on US sustainable investing trends, due to be released in December. The report aims to help map the industry’s scale by offering data on the size and growth of sustainable investing, highlighting major trends including climate change, integration of sustainability or ESG characteristics, sustainability-themed and impact investing, and facilitating global comparisons. The 2024 trends report will comprise three sections: the headline numbers of sustainable investing, the trends of sustainable investing, and recommendations/call to actions for investors and policymakers. This edition marks the 30th anniversary of US SIF’s biennial trends reports, first published in 1995. Its ‘trends of sustainable investing’ section retrospectively looks at the past three decades and provides a summary of ten major patterns. “Whether you’re an asset manager, asset owner, institutional investor, or financial advisor, your firm’s sustainable investing data and your perspectives on key issues and trends are vital to developing accurate metrics and an overarching narrative for the trends report,” said Jun Han, Senior Research Manager at US SIF. “By providing your data and insights, you help create a more accurate and comprehensive picture of the sustainable investing landscape. This, in turn, benefits the entire industry by identifying emerging issues and trends, informing policy decisions, and guiding strategic investments.”

Stronger action must be taken if the New York State (NYS) is to meet its renewable energy goals, according to an audit released by State Comptroller Thomas DiNapoli. The audit acknowledged the considerable steps already taken by the Public Service Commission (PSC) and the NYS Energy Research and Development Authority (NYSERDA) for the state’s transition to renewable energy, but found inadequate planning, monitoring and assessment of risks and challenges in efforts to meet targets under the Climate Leadership and Community Protection Act (CLCPA). The CLCPA has fixed a goal of 70% of renewably sourced electricity by 2030 and net-zero emissions by 2040 for the NYS. “New York is moving in the right direction to transition to renewable energy, but we found better planning, monitoring of progress and timely assessment of risks by [the] PSC is needed to achieve our ambitious clean energy goals,” DiNapoli said. “New York has been a leader in its efforts to reduce greenhouse gas emissions and the threats caused by climate change, and identifying existing and emerging challenges will improve the likelihood that we succeed.” DiNapoli’s audit recommended the PSC begin a comprehensive review of the CLCPA, including an assessment of progress towards the goals and annual funding commitments and expenditures. It also said the PSC should address existing and emerging risks on a continual basis to minimise the impact on the state’s ability to meet climate goals, assess expected renewable energy generation and timing of projects not yet operable, and perform a detailed analysis of cost estimates –periodically reporting results to the public.

Consulting firm LCP has welcomed the recently elected UK Labour government’s plan to require pension schemes to produce transition plans, calling it a “transformative” shift in regulatory emphasis. The Labour manifesto proposed a ruling for UK pension funds to produce strategies that are consistent with keeping global warming below 1.5°C. This would shift the current emphasis of existing climate requirements for pension schemes from an “outside-in” to an “inside-out” perspective, LCP said. The group recommended the mandate should initially only apply to larger schemes, with eligibility based on risk exposure. Disclosure rules should also be principles-based as opposed to being too prescriptive, it added. In addition, the government should look to clarify that trustees can take a long-term perspective and consider pensions’ long-term, real-world impact as part of their fiduciary duty. “Transition plans will potentially be a transformative shift of the regulatory emphasis when it comes to climate monitoring and reporting, encouraging trustees to consider the real-world impact of their decisions,” said Claire Jones, Head of Responsible Investment at LCP. “The devil will of course be in the detail, and we wait to see what the requirements will be. Ideally, the plan will be principles-based with a focus on actions.”

Investor services group IQ-EQ’s second sustainability report has highlighted the need for accrued efforts to achieve greater gender balance in asset management. The report showed that just 23% of all investing roles at private equity (PE) firms globally are held by women, and called on the sector to commit to greater gender inclusion and equity. The report also flagged initiatives spearheaded by IQ-EQ to close the diversity, equity and inclusion gap (DE&I) in the industry. This included supporting female fund managers with the IQ-EQ Launchpad – an initiative designed to help first-time female managers launch and build their funds, as well as the ‘Elevate’ programme, which backs female employees through workshops, guest speakers, and groups to further develop their skills. “Fuelling female success in this sector starts with breaking down barriers, working towards achieving pay parity across genders [and] improving the ratio of women in senior-level management positions,” said Caroline Bagshaw, Group Chief People Officer at IQ-EQ. “We are proud of the strong progress we’ve made in addressing gender equality. However, our sustainability journey is far from over [and] we remain dedicated to advancing our DE&I initiatives and moving the needle in this sector.”

The government of Azerbaijan, which will host COP29 in November, has said reaching a new agreement on climate finance was at the top of its list of priorities for this year’s conference. The New Collective Quantified Goal on Climate Finance (NCQG) is intended to build on a pledge in 2009 that industrialised nations would provide US$100 billion a year in climate finance to low-income countries – a target that was reached for the first time in 2022. The NCQC will increase this amount. “Adopting the NCQG will be a pivotal moment for whether parties can make progress on the means of implementation and support, and the Paris Agreement more broadly,” Mukhtar Babayev, COP29 President-designate and Azerbaijan’s Minister of Ecology and Natural Resources, wrote in a letter to parties and constituencies this week. “This will be the first major finance goal after the Paris Agreement and we are sparing no effort to support the parties to reach consensus,” he added. The minister also hopes to finalise details of Article 6 of the Paris Agreement – which deals with carbon markets and has long been a point of disagreement among nations – and to maintain momentum for the creation of a Loss and Damage Fund to help poorer nations pay for the negative impacts of climate change. Babayev also urged nations to come with updated emissions reduction targets – known as nationally determined contributions (NDCs) – ahead of the deadline in June 2025, as well as finalised national adaption plans (NAPs), which are also due in 2025.

There have been significant developments in the sustainable finance ecosystem across south-east Asia, Sustainable Fitch has said. In a new report – State of Play 2024: Key ESG Policy and Regulatory Developments in South-East Asia – the group highlighted that the importance of sustainability issues had surged, prompting organisations throughout the region to develop and adopt robust ESG policies and frameworks. Following the launch of the International Sustainability Standards Board’s standards for sustainability-related financial reporting, most south-east Asian countries are now planning to integrate those into their reporting regimes. Clear timelines have been established for listed companies, with some countries extending similar requirements to large non-listed firms. Though not an exhaustive review, the report offered an insight into some of the most impactful measures introduced. While initial efforts predominantly targeted climate mitigation, an emphasis on strategic climate adaptation is now growing – with the increased frequency and severity of extreme weather events prompting several governments and regulators to prioritise such measures. “The focus on addressing transition and transition-related issues has grown substantially over the last year,” said Sustainable Fitch. “Tackling decarbonisation and confronting the realities of climate change are becoming pivotal elements of national environmental strategies.” However, a common approach across the region has yet to emerge, reflecting diverse local priorities and circumstances, the report stressed.

A survey published by international law firm Mayer Brown has revealed a widespread lack of preparedness and short-termism among financial services leaders on net zero. Although nearly three-quarters of business leaders said companies must embrace ESG initiatives if they are to maintain relevance in the future, only 18% of financial institutions and 27% of investment firms currently have a net-zero transformation strategy that extends beyond the next 12 months. “A move away from short-termism has been at the core of the ESG movement,” said Tim Baines, Partner at Mayer Brown. “On the one hand, there is pressure for businesses to focus on short-term financial returns and profit maximisation. On the other, there is a growing recognition of the importance of adopting a longer-term perspective that considers social and environmental factors.” This balancing act is making it difficult for businesses to be able to implement their long-term environmental and net-zero strategies, Baines added. The study identified transition-related costs as another significant obstacle to business transformation, with respondents highlighting their concerns about prolonged funding and expensive net-zero plans. “We continue to see more innovative and imaginative forms of financing for the transition to net zero,” said Peter Pears, Partner at Mayer Brown. “As sustainable finance has grown, it has matured – companies and their advisers are often looking to ‘push the envelope’ in terms of sustainability-related structures and sources of capital to access the funding they need. Transition finance […] is something we are seeing more and more of.”

Britain must urgently address greenhouse gas emissions from transport, heating, industry and agriculture if it is to meet its next legally binding climate target, according to the Climate Change Committee’s (CCC) 2024 Progress Report to Parliament. The UK has more than halved its emissions since 1990 – the first country to do so – but the majority of those reductions came from removing coal from the electricity sector. Under the Paris Agreement, the country has committed to reducing emissions by 68% by 2030. The CCC, a statutory body tasked with advising and monitoring the government on climate policy, said to meet these targets the UK would need to double the rate of reductions in transport, and triple efforts in buildings. Offshore wind installations must also triple, while onshore wind must double and solar installation must increase fivefold, the report said. By 2030, 10% of homes will need to be heated by electric heat pumps rather than gas boilers, up from 1% today; and electric vehicles (EVs) would need to make up nearly 100% of new car sales, up from 16.5% today. The CCC criticised the previous Conservative government – which lost a general election to Labour earlier this month – for rolling back a number of climate policies. “The new government has an opportunity to course-correct, but it will need to be done as a matter of urgency to make up for lost time,” said Professor Piers Forster, interim Chair of the CCC. “They are off to a good start. Action needs to extend beyond electricity, with rapid progress needed on electric cars, heat pumps and tree planting.” The CCC set out 10 priorities for the new Labour government this year: make electricity cheaper; reverse the previous government’s policy rollbacks; remove planning barriers for onshore wind, heat pumps and EV charging infrastructure; introduce a comprehensive programme for decarbonising buildings; accelerate decarbonisation of industrial heat; ramp up tree planting and peatland restoration; finalise policy for engineered carbon removals; develop a skills replacement policy; and strengthen national adaptation plans.