During 2025 the political and regulatory landscape for sustainability themes has been changing, together with a polarisation of views. Despite this, institutional investors still believe sustainability factors can drive long-term value creation and growth and they have remained steadfast on their principles. A joint study between Schroders – a British multinational asset management company – and Oxford University’s Business School, examined more than 250 publicly listed companies. The findings indicated that impact portfolios generated strong, competitive absolute and risk-adjusted returns relative to broader, unconstrained portfolios.
The World Resources Institute’s climate-action analysis for 2025 finds that none of the 45 key global climate-action indicators are currently on track to meet the 2030 targets aligned with the 1.5°C pathway. This stark assessment reflects the prevailing political uncertainty and ongoing divergence in national approaches to the low-carbon transition. Climate physical risk has moved decisively to the forefront of the sustainable investment agenda, driven by the increasing frequency and severity of extreme weather events and growing recognition of their direct financial impacts.
With rising geopolitical tensions, cost-of-living pressures and demographic shifts, sustainable investment is increasingly integrating social resilience into both risk management and investment vehicles targeting social outcomes. In 2025, investors increasingly explored how investment – when parallel with social purpose – can help address some of a country’s most pressing structural challenges and have translated their efforts into concrete investments.
