Insights

Climate commitments face headwinds – but corporate action remains resilient

As an asset manager that places Environmental, Social & Governance (ESG) factors front and centre in its investment process, Voyager takes a keen interest in developments in this arena, and their potential impact on clients’ portfolios. Despite recent setbacks in climate initiatives by major financial institutions, there are signs that corporate-level efforts to address environmental challenges remain robust.

This year has seen a worrying shift in attitudes towards climate action among major banks and asset managers. Several leading names in global finance have stepped back from climate alliances, raising concerns among environmental advocates.

In the United States, major banks such as Goldman Sachs, JPMorgan Chase, Wells Fargo, Citibank, and Morgan Stanley have exited the Net-Zero Banking Alliance — a collective of financial institutions committed to cutting emissions tied to their lending and investment activities. European counterparts have followed suit, with Barclays, HSBC, and UBS all announcing their withdrawal. Both HSBC and UBS have also delayed targets to decarbonise their operations.

Similar retreat has occurred in asset management. The Net Zero Asset Managers initiative, which once signalled industry-wide alignment on climate goals, has effectively suspended operations.

Much of this retreat appears driven by political pressure, particularly in the US, where the current Trump administration has taken a more combative stance towards corporate climate initiatives — including the threat of antitrust investigations into financial firms that participate in green alliances. On a global scale, there are increasing concerns about the potential economic costs of stringent climate commitments.

Yet, beneath these high-profile withdrawals, broader trends suggest that corporate engagement with climate issues is far from over.

A growing number of public companies continue to disclose their carbon emissions, with few wishing to risk the reputational damage of rising year-on-year figures. According to data from the Carbon Disclosure Project, corporate climate reporting has surged — from fewer than 5,000 firms in 2014 to over 22,000 in 2024.

US companies, despite regulatory headwinds, remain active in climate-related disclosures. In their 2024 financial filings, 30% of firms referenced ESG (environmental, social and governance), 47% discussed climate change, and 52% mentioned sustainability.

At the same time, ESG data has become deeply embedded in investment analysis. Revenue earned by ESG data providers has grown from $245 million in 2016 to $1.56 billion in 2024, according to research firm Opimas. MSCI, one of the largest players in this space, reported ESG and climate data sales of $357 million in 2024, growing further in 2025. Nearly all of the world’s top 50 asset managers now incorporate ESG metrics in their processes.

Meanwhile, the volume of assets managed under sustainability-focused strategies continues to rise. Morningstar reports global sustainability fund assets have reached $3.5 trillion as of Q2 2025.

Crucially, the launch of the International Sustainability Standards Board (ISSB) frameworks in 2023 has brought greater consistency to sustainability reporting. While the US Securities and Exchange Commission has distanced itself from these standards, 37 jurisdictions — including Brazil, Australia, Kenya, and Malaysia — have committed to adoption. The frameworks have also received backing from the G7, IOSCO, and the Financial Stability Board.

Though some corporates may scale back public references to climate, the momentum behind ESG reporting and responsible investing has proven durable. Despite the shifting political winds, environmental accountability within business and finance is unlikely to be easily reversed. Our portfolio managers’ view continues to be that companies which demonstrate strong commitments to ESG will likely outperform over the long term.

1st October 2025

Andrew Morgan, CFA

Portfolio Manager

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