How can institutions forge impactful climate strategies that are right for them and their end beneficiaries? Our “Confidence in a changing climate” guide showcases some of the solutions we have developed to help.
Many institutional investors have climate commitments and interim targets in place but increasingly need to demonstrate progress through portfolio decarbonisation and real-world impact. Yet implementation remains complex.
Investors must navigate competing pressures: short-term performance considerations alongside long-term climate risks; evolving regulation across jurisdictions; and uncertainty around the speed and shape of the transition. Against this backdrop, there is no one-size-fits-all solution. Instead, each investor needs a tailored approach that starts with where they are today.
Strategies built to support investors’ climate journeys
Climate investing spans a wide spectrum of approaches. Some strategies focus on lowering a portfolio’s carbon intensity relative to a benchmark. Others allocate capital to climate solutions, transition technologies or resilient infrastructure. There are also mandates that aim to align portfolios with net-zero pathways.
Climate objectives can be pursued across public and private markets, with each asset class offering different strengths.
Ultimately, the effectiveness of a climate strategy depends on how well it aligns with each investor’s goals, constraints and long-term priorities.
Delivering on investors’ climate ambitions through enhanced frameworks
Having the appropriate frameworks provides the structure, discipline and transparency investors need to translate high-level climate ambition into clear investment decisions and measurable progress.
Our enhanced Net Zero Investment Framework (NZIF) builds on the framework of the IIGCC, supplemented by a comprehensive set of proprietary indicators.1 This in-house-developed framework provides a bespoke, practical approach for investors looking to design and implement net-zero mandates for their assets, with clearly defined thresholds and data-driven insights.
Supporting real-world decarbonisation through a holistic approach to climate stewardship
Our holistic approach to stewardship recognises that companies do not operate in isolation. System-wide barriers – such as policy misalignment, infrastructure gaps or value chain dependencies – often constrain the pace of change. Addressing these challenges requires engagement that goes beyond individual companies, bringing together issuers, policymakers and other stakeholders.
By combining data-driven frameworks with targeted engagement, investors can focus stewardship efforts where they can make a difference, particularly among companies facing the greatest transition challenges.
Climate data and analytics capabilities
Climate data and analytics can support investors to move beyond high-level ambition to evidence-based decision-making across risk management, portfolio construction and stewardship.
We are increasingly using data, models and quantitative frameworks and analytics to deliver on clients’ climate objectives, comply with regulatory obligations, and deliver decision-ready data-driven insights.
Looking ahead
In our view, many of the foundations of the transition – including renewable-energy scale-up and lower technology costs – are increasingly in place. In this environment, investors equipped with robust frameworks, credible data, flexible strategies and effective stewardship are better positioned to navigate volatility while staying aligned with long-term climate ambitions.
- The different pathways professional investors can take in their climate investing approach.
- Our climate investing capabilities across strategies, solutions, stewardship and climate data and analytics.
