Where does transition finance need to go from here?

Transition finance investment products continue to gain popularity among investors, according to recent ESG fund flows reports. Yet it is not always possible to establish whether capital is being funnelled into the critical activities needed to transform carbon-intensive sectors. In this episode, Navindu Katugampola, global head of sustainability at Morgan Stanley Investment Management, explores best practices on transition finance based on his experience overseeing the $1.9 trillion US fund manager's activities in the area. Key topics discussed include what to look for in company transition plans, regulatory and policy developments, and the climate transition's regional characteristics.

Asset managers are under pressure to respond to a wide range of client demands on sustainability issues, from stewardship to decarbonisation, while grappling with a rapidly changing policy landscape. In this episode of The Responsible Investor Podcast, Wendy Cromwell, who heads up sustainable investment at Wellington Management, tells Elza Holmstedt Pell how the US giant navigates this, and how conversations with asset owners are evolving. This wide-ranging interview digs into engagement expectations, US policy changes, addressing physical climate risks, and the intersection between sustainability and key global investment themes.

In recent years, investors have increasingly been trying to work out how to best address deforestation in their portfolios.  How has action evolved over the years? What has been the impact of changes in the regulatory environment, in particular the EU’s deforestation regulation? And to what extent, is it currently possible to set deforestation-free portfolio targets?  Responsible Investor’s nature reporter Gina Gambetta sits down with Graham Stock, senior sovereign strategist, emerging markets at BlueBay Asset Management, to dig into these topics.  Stock is also the co-chair of the Investor Policy Dialogue on Deforestation (IPDD). Launched in 2020, the initiative involves investors engaging with policymakers in Brazil, Indonesia, the UK, US and Europe.  He gives behind-the-scenes insight into how the IPDD came into being, what the experience has been like so far, and how he sees it continuing to evolve going forward.

Investors are urgently seeking to understand how their portfolios will be affected by physical climate risks in the wake of more frequent extreme weather and regulatory changes. Climate risk data, and the related topic of adaptation and resilience, has also been a key focus of Responsible Investor's editorial content this year. We most recently published deep dives on both physical risk data and risk management as part of our COP30 Report. In this episode, Khalid Azizuddin speaks to Nick Stansbury, head of climate solutions at the asset management arm of Legal & General, about the challenges of working with data on physical climate risk.

Just over two years ago, the European Commission launched the first step in the long road to reform of the EU Sustainable Finance Disclosure Regulation (SFDR). On 20 November, the Commission's proposed amendments to the law were released. These will introduce concrete product categories and do away with both entity-level PAI reporting and the definition of "sustainable investment". In this episode, Dominic Webb talks to Anne Schoemaker, head of regulatory and investment selection solutions at Morningstar Sustainalytics, and Dennis Baas, head of sustainability strategists at Allianz Global Investors, about the review, how it may affect the market and the next steps for SFDR.

With 2050 on the horizon and a challenging political and economic environment for companies looking to hit net zero, engagement on climate change is more important than ever. As part of its new climate and investors focus, Responsible Investor has published a series of articles looking at the future of climate engagement ranging from how climate collaborations are evolving to engagement with hard to abate sectors and how investors are responding to an increasingly challenging environment. In this episode, senior reporters Dominic Webb and Gina Gambetta discuss their findings and how investors across the world are evolving their approaches to climate stewardship.

Climate engagement has been on investors’ agendas for more than a decade. So what progress has been made in that time? What have we learned about what works and what doesn’t? And, crucially, what does that mean for how we move forward? To explore these questions, our editor Lucy Fitzgeorge-Parker sat down with sustainability and stewardship veteran Colin Melvin of Arkadiko Partners. As co-author of the Principles for Responsible Investment and founder of engagement specialist Hermes EOS, he has been at the forefront of conversations on climate and corporate action for 20 years. In this episode, he discusses climate engagement in the era of ESG backlash, the role of fiduciary duty, how to prioritise corporate engagements, and the dangers of separating sustainability from core investment practice.

Over the course of his three years as comptroller of New York City, Brad Lander has guided the city's pension systems in achieving their climate targets, divesting from fossil fuel companies and seeing significant success with shareholder resolutions on a range of topics. Lander, whose term will end in January, joins The Responsible Investor Podcast to discuss his proudest achievements in office, the future of shareholder proposals and whether he thinks responsible investment can survive Donald Trump's second term. After declining to run for re-election in order to make a bid for the mayor's office, Lander also discusses what advice he would give to his successor and what he still wants to get done during his remaining time in office.

At $96 billion in assets, the Oregon Public Employees Retirement System is one of the largest public pension funds in the US. As of this year, it is also one of the few to have been handed a legal mandate to manage climate risk in its investments. In this episode, Oregon state treasurer Elizabeth Steiner discusses the state's new legislation on climate investment, the challenges and trade-offs of steering a giant portfolio towards net zero, and the conversations the fund is having with portfolio companies and asset managers over their climate rollbacks. Steiner spent over a decade as an Oregon state senator before being elected treasurer last year. Her responsibilities include running the state's debt management operations and savings programmes, as well as managing its pension funds and other investments.

After a turbulent first half of the year following the release of the EU's sustainability Omnibus, Brussels is back in session and gearing up for a busy autumn of discussions and decisions on how to simplify a number of sustainable finance regulations. Formal negotiations between EU lawmakers are expected to kick off shortly on proposed changes to the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD), while a consultation on the European Sustainability Reporting Standards (ESRS) will close at the end of this month. It comes as the European Commission last month promised the US that it will make efforts to ensure its corporate sustainability reporting and due diligence rules do not impose “undue restrictions” on transatlantic trade. In this episode, senior reporter Fiona McNally – who has been on the ground in Brussels – talks to deputy editor Elza Holmstedt Pell about the biggest things to watch for as the future of EU sustainability and green rules are determined.