Mounting pressure: Start of sustainable investing 2.0?

The number of calls to action around net zero and climate recently has been extraordinary

Over the past few weeks, ESG Clarity has covered a proliferate number of calls to action around sustainability and net zero.

While the number of releases popping into our inboxes at this time of year is not unusual, the tone and urgency of the messages within them is.

Let’s recap. Today, we are publishing three such stories:

TheCityUK and PwC have published a 10-point action plan for governments, regulators and our industry to unlock vital investment for the net-zero transition.

On biodiversity, CEOs of financial institutions have written to the Coalition of Finance Ministers for Climate Action urging them to address the importance of, and take urgent action towards, aligning financial flows with the goals and targets of the Global Biodiversity Framework in the run-up to COP15 in Canada in December 2022. 

And also on biodiversity, investor network FAIRR has announced an engagement campaign, backed by Robeco and Aviva, calling for animal agricultural firms to disclose how manure – which is being dumped and polluting waterways – is managed in their supply chains.

While the former may be focused on a more niche, but very impactful, part of the economy and environment, the rest of this week’s calls to action have been more wide-reaching.

In the UK, the new prime minister Liz Truss is under increasing pressure to deliver on net zero with three of the most well-known responsible investment organisations – the Institutional Investors Group on Climate Change (IIGCC), the Principles for Responsible Investment (PRI) and UK Sustainable Investment and Finance Association (UKSIF) – calling for clearer net-zero policies that transform the economy.

The PRI has had a busy month. At the end of August it coordinated 65 investment companies that called for better alignment between how different regulatory bodies around the world are asking for sustainability to be reported. This is ahead of the International Sustainability Standards Board (ISSB) publishing its requirements for 2023.

We also saw investment managers representing $39trn in AUM sign a statement calling for governments around the world to raise their climate ambition and enact policies that tackle five priority areas, specifically calling for mandated climate transition plans from corporates.

There has been pressure from civil society groups too; on Tuesday, 16 NGOs said the UN Environment Programme Finance Initiative (UNEP-FI) and the Net Zero Banking Alliance (NZBA) steering committee need to double down on how its members are complying with net-zero targets.

That’s a lot of activity in a short space of time – but it is pleasing to see, this level of collaboration is impressive. Investors, member organisations and NGOs are all working together to up the ante in terms of pressure on those in charge – governments and regulators.

They want to see disclosure, frameworks, incentives, targets being met – at the very least more advanced conversations around these topics.

Is this the beginning of the next level of sustainable investment? Only time will tell if any of these calls to action turn into real action, but with so much pressure being piled on – unlike anything we have seen before – it’s difficult to see why much of this wouldn’t materialise.


Natalie Kenway

Natalie is editor in chief at MA Financial covering ESG Clarity, Portfolio Adviser and International Adviser. She was previously global head of ESG insight for ESG Clarity and has been an investment journalist...