Responsible Investing News

Road to COP30

2025 has appeared challenging for climate action, but beneath the headlines, momentum continues to build. As the saying goes, actions speak louder than words. Despite the noise, the energy transition is accelerating, with clean energy investment reaching a record $2.2 trillion – two-thirds of the $3.3 trillion in total global energy investment. While this still falls short of what's needed to meet climate goals, it reflects how the economics of clean energy are driving real progress in the global economy.

New York Climate Week in September centred on the theme ‘Power On’ for climate action, reflecting a shift in climate leadership from ambition to delivery. This translates into scaling investment across key areas: clean energy, energy efficiency, electrification, climate adaptation and nature-based solutions. For responsible investors, this means thinking about increasing exposure to these sectors and managing the risks associated with increased warming from delayed decarbonisation.

Looking ahead, COP30 in Brazil this November will be a pivotal moment for global climate momentum. The focus will be on implementation, translating pledges into action while promoting inclusivity and science-based decision-making. COP30 will also integrate climate and biodiversity agendas, highlighting the Amazon’s role as a carbon sink and the critical importance of natural ecosystems for a sustainable future.

For responsible investors, global climate gatherings like New York Climate Week and COP30 serve as important signals for market priorities and innovation. These events help shape investor engagement strategies whether through dialogue with companies or exercising voting rights and they can highlight risks for sectors that are slow to respond. Understanding where capital is flowing and which solutions are gaining traction is essential for aligning funds with a sustainable and resilient future.

Carbon reduction

Can you imagine a future with clean air and a stable environment? This is a future we can invest in to reduce carbon emissions in our economies and replace our reliance on fossil fuels with low-carbon energy sources.

The global economy is closely tied to carbon emissions, yet the true cost of carbon is often not fully reflected in company valuations. This poses risks for investors who continue to finance high-emission activities. Responsible investors are increasingly factoring carbon into their decision-making, shifting capital away from carbon-intensive businesses toward those actively managing emissions and pursuing credible decarbonisation strategies. Supporting low-carbon sectors and sustainable innovation is essential to building a healthier economy for people and the planet.

To make these shifts, investors are adopting a more sophisticated view of long-term value. They’re recognising that short-term market prices often fail to account for system risks affecting the whole economy, linked as it is to carbon emissions, climate volatility and the transition to a low-carbon economy. This is why financial analysis now goes beyond traditional metrics to include non-financial indicators such as carbon intensity and climate resilience.

There is no one perfect way to measure carbon for investment decision making so the recommended approach, just like with financial metrics, is to look at several measures.

There are 3 core carbon metrics agreed on by experts – these are:

Carbon metric	Description	Positive	Negative
Financed emission – tCO2e	Carbon emissions allocated to investors based on how much equity or debt owned	Absolute emissions based on how much you own of companies	Emissions changes with the proportion of company ownership
Economic emissions intensity (EEI) – tCO2e/$m invested	Carbon emissions allocated to investors based on market value	Can be used to compare funds to each other and a benchmark/comparator	Emissions changes with the value of the company
Weighted average carbon intensity (WACI) – tCO2e/$m revenue	Carbon emissions allocated to investors based on emissions per $ revenue	Makes comparison across investments easier as not based on ownership	Using revenue favours companies with higher pricing relative to peers

Our investment adviser Aberdeen and other third-party managers we invest with are using these metrics to provide responsibly invested funds. We measure and monitor weighted average carbon intensity (WACI) as the key measure of our fund’s investment in carbon-intensive companies and our efforts to reduce this over time.

Investing in nature

Investing in nature is becoming a strategic priority for long-term investors. The loss of biodiversity has weakened the planet’s ability to absorb carbon and regulate climate, with the World Wide Fund for Nature (WWF) reporting a 73% decline in monitored wildlife populations between 1970 and 2020. Restoring nature offers one of the fastest and most cost-effective ways to reduce carbon pollution and build climate resilience.

For global investors, nature also plays a critical role in managing systemic risks affecting the entire economy, like climate change. Healthy ecosystems help the planet adapt to a warming world, absorb carbon, and can reduce air and water pollution. It’s estimated that nature-based solutions could deliver up to 37% of the carbon reductions needed by 2030, often at lower cost and with broader benefits than engineered alternatives.

So how do you invest? While nature is not yet a fully recognised asset class, momentum is building. Financial structures are being developed to channel capital into nature restoration, with the aim of delivering long-term environmental and financial returns. Responsible investors are increasingly looking to support these efforts as part of a diversified, future-focused portfolio.

Responsible investing fund performance

Our responsible investing approach has now been implemented across all investment funds except for the Virgin UK Index Tracking Trust (this is under review).

We continue to work with our investment adviser to improve non-financial fund performance. This quarter, a new fund was introduced to our fund-of-funds, the Aberdeen Evolve European Equity Index. This fund has replaced the iShares Continental European Equity ESG Index in the Defensive Fund, as well as Growth Funds 1 and 2. This fund uses responsible investing strategies with higher minimum standards, carbon targets and allocations to companies with revenues classified as environmentally sustainable.

The Climate Change Fund sold out of Samsung in the quarter, a stock which had been held for a long period but had a less compelling investment case for the future than the battery manufacturer Contemporary. The fund remains invested 61% in the US where, despite political sentiment and federal policy, there remains conviction in the financial outlook due to increased environmental activity based on extreme weather responses and overall economics for clean energy and sustainability transition globally.

Measuring non-financial performance this quarter shows all funds performing across key non-financial metrics (note: the UK Index Tracking Trust is not included in the metrics below):

Non-financial metrics	Description	Q2 2025 performance
ESG score ESG quality score scale 0-10 (10 highest score)	Checks our funds are shifting towards investing in companies with better ESG scores	All funds’ ESG scores are higher than their comparator or benchmark
Carbon emissions WACI scope 1&2 (tOC2e/$m revenue)	Checks that our funds are lowering their exposure to the most carbon-intense companies	All funds’ WACI is lower than their comparator or benchmark
Exclusions	Checks that funds are excluding investing in specific harmful companies or business practices	All exclusions are aligned to fund policies

See more information on our responsible investing approach.