Aga Siemiginowska, head of sustainability at Oakley Capital, discusses the firm's efforts in developing ESG strategies for itself and its portfolio companies, such as ACE Education. Oakley has been active in initiatives like Climat International and has contributed to the development of TCFD guidance for private equity. The firm is also adapting to sustainable investment regulations like SFDR and is a member of Level20, aiming to increase female representation in senior positions. Oakley has seen a shift from 30% to 47% women in its workforce between 2021 and 2023.

European companies are increasingly adopting responsible tax practices, yet a third lack ESG integration in tax matters, according to the Tax Transparency Benchmark by VBDO and PwC. The benchmark assessed 116 companies, revealing Philips as the leader in tax transparency, followed by NN Group and Repsol. While most companies disclose tax strategies, there's a call for alignment with core values and sustainability. Regulatory changes and internal recognition of responsible tax policies are driving improvements, with expectations for further progress due to new reporting directives.

The sustainable and responsible investment (SRI) landscape is facing increased challenges and uncertainties, particularly due to the cost-of-living crisis affecting investor behavior, political debates over sustainability definitions and priorities, and evolving regulatory expectations globally. Despite strong net retail inflows to SRI funds in the UK during 2020 and 2021, these have decreased in 2022 as economic pressures mounted. Investment managers are anticipating contributing to climate solutions at the upcoming COP28 summit, while also navigating debates on energy security and weapon production investments. Regulatory changes are imminent, with the UK preparing for new Sustainable Disclosure Requirements and sustainable investment labels, the EU reviewing its Sustainable Finance Disclosure Regulation, and the US SEC finalizing ESG-related rules. Investment managers remain committed to client outcomes and are working on industry-wide frameworks to define responsible investment approaches and improve communication with savers.

The UK is facing a water scarcity crisis with demand outstripping supply, potentially leading to shortages in London and the Southeast within 25 years. The regulatory environment for water companies is complex and lacks sufficient incentives for infrastructure investment. This has led to significant water loss and pollution. The UN's goal for clean water and sanitation by 2030 is not on track, requiring accelerated progress. Campaigners like Feargal Sharkey have raised public awareness, and investment managers are engaging with the issue. Stricter regulation and enforcement are needed to drive progress and investment opportunities. Companies like Veralto and Xylem, providing water efficiency solutions, stand to benefit from the growing demand for water in various industries, including semiconductor manufacturing. Efficient water use is crucial for balancing supply and demand, and upcoming investments and regulatory changes could catalyze improvement and offer attractive opportunities for investors.

Investing in emerging market (EM) sovereign debt from a sustainability perspective can be challenging due to subjectivity, reactivity, and complex data. A framework based on six UN Sustainable Development Goals (SDGs) sub-targets related to climate, health, and empowerment helps to determine eligibility for sustainable EM investing. Countries passing all six metrics qualify, while those failing three or more do not. Examples include Chile, which passes all metrics; Brazil, which fails due to deforestation; and the Philippines, which fails on three metrics. The framework aims to be simple, transparent, objective, and allows for engagement with countries to improve their sustainability measures.

The debate on whether environmental, social, and governance (ESG) themes should be separated and the bundling of ESG disbanded is ongoing. A report by Michael Goldhaber from NYU Stern Center for Business and Human Rights suggests a return to values-driven investing, focusing on narrower themes with broader exclusions to limit negative business impacts on the environment and society. The report criticizes the use of composite ESG scores and advocates for customized ESG portfolios that align with individual client values, potentially prioritizing these values over financial returns. It also recommends aggressive screening for ESG funds and calls for regulatory measures to enforce transparency and better data reporting by corporations, aligning with some investor calls in the EU.

The PRI in Person conference in Tokyo, supported by the United Nations, emphasized the transition from sustainable commitments to action, focusing on sustainable practices in investment. Key takeaways include the need for local perspectives in global solutions, the expanding role of private capital markets in sustainability, the immediate impact of sustainability-related regulation, the interconnectedness of sustainability topics, and the importance of maintaining a credible sustainable debt market. The conference highlighted the role of governments, private sector, and market actors in achieving sustainability goals, particularly in Asia and emerging markets.

Renewable energy infrastructure, once a lucrative investment option with strong ESG credentials, has seen a decline in valuations and fundraising due to war, inflation, and higher interest rates. Despite this, the fundamentals of many investment companies in the sector remain strong, with healthy dividends and underlying support from both private and professional investors. Analyst Matthew Hose from Jefferies suggests that for a resurgence in investor interest, companies need to focus on growth while maintaining dividends, potentially through development projects. The UK National Infrastructure Commission estimates that private sector investment of £20bn-£35bn annually is needed from 2025 to 2050 to achieve net zero, positioning investment companies as a crucial part of this transition.

Michael Sheren, a former senior adviser at the Bank of England and current president and chief strategy officer of MGVX, highlights the importance of considering the impact of carbon pricing on portfolio valuations. He discusses the limitations of voluntary frameworks, the outlook for COP28, carbon tax, and voluntary carbon markets, following the release of recommendations from the Taskforce for Nature-related Financial Disclosures. Sheren also mentions a multi-strategy green fund management company awaiting approval from the Monetary Authority of Singapore.

The Criterion Institute has released standards of practice to improve the quality of implementation in gender lens investing. These standards aim to address power dynamics in finance, incorporate gender inequalities into investment risk evaluations, and challenge cost accounting norms by considering social inequity as a cost factor. Developed in response to gender lens investors' requests, the standards provide tools for assessing whether fund managers can achieve investment goals. The approach is the result of collaboration with fund managers, activist organizations, and governments.

ESG investors often rely on emissions figures to measure a portfolio's sustainability, overlooking broader environmental, social, and governance impacts such as deforestation, data protection, and human rights violations. The article criticizes this 'carbon tunnel vision' and highlights the complexity of global supply chains and life cycles of assets. It argues that regulatory oversight cannot replace the need for investors to thoroughly vet their assets and calls for investors to ask tough questions about the wide-ranging implications of their investments, including labour and human rights in supply chains, land use change, and local versus global priorities.

The article criticizes the choice of the title 'Wobbly Bits' for a report on women's finance by AJ Bell, arguing that it undermines the progress made in diversity and gender equality in the financial services industry. Despite the report's valuable content and data, the title is seen as patronizing, irrelevant to financial equity, and perpetuating negative stereotypes about women's bodies. The article suggests that the title could deter the target audience and calls for better governance in the industry to avoid such missteps.

The first Global Stocktake of the Paris Agreement coinciding with record extreme weather suggests the world is not on track to meet climate goals. The article discusses the challenges of transitioning to a low-carbon economy, the ineffectiveness of divestment, the need for real-world decarbonization, and the importance of a just transition. It highlights the role of policymakers alongside investors and points out the geopolitical and economic challenges in achieving the Paris goals. The U.S. investment in direct air capture facilities is cited as a positive step towards carbon removal and job creation.

The author is a UK-based freelance journalist and global editor of ESG Clarity, with interests in feminism, representation, and economic equality. The journalist has a diverse portfolio, having written for various publications such as Ms. Magazine, Citywire, and New Statesman, and has covered topics from gender lens investing to sexism. The journalist has been recognized in the industry, being shortlisted for awards at the Headline Money Awards. They also run a weekly newsletter called Rebalancing Act, focusing on women's financial and economic queries. The author invites potential collaborators to get in touch for future work.