Understanding Esg Investing

Integration of SDGs and ESG Pillars 🌎 For businesses committed to sustainability, effectively categorizing Sustainable Development Goals (SDGs) under Environmental, Social, and Governance (ESG) pillars can streamline strategic planning and operational execution. This approach clarifies how initiatives within these pillars can directly contribute to achieving broader global goals, thus enhancing business impact and compliance. The Environmental Pillar of ESG aligns with SDGs focused on ecological stability, such as Climate Action, Clean Water and Sanitation, and Affordable and Clean Energy. Businesses that enhance their environmental strategies not only adhere to regulatory demands but also drive efficiencies in resource use, which can lead to reduced operational costs and improved market positioning. Under the Social Pillar, SDGs like Quality Education, Gender Equality, and Decent Work and Economic Growth are pivotal. By focusing on these areas, companies can foster a more inclusive and equitable work environment, enhancing employee satisfaction and community relations, which are crucial for long-term business sustainability and customer loyalty. The Governance Pillar supports the achievement of SDGs related to ethical practices and equitable growth, including Industry, Innovation, and Infrastructure, and Peace, Justice, and Strong Institutions. Strengthening governance can help businesses manage risk, operate transparently, and maintain compliance with increasing legal standards, securing trust and support from investors and stakeholders. Integrating SDGs with ESG initiatives allows businesses to not only address specific global challenges but also to enhance their strategic planning processes. This structured approach provides a clear pathway for companies to evaluate their impact, set measurable targets, and communicate progress in a manner that resonates with global standards and stakeholder expectations. Furthermore, while the example diagram shows one method of mapping SDGs to ESG pillars, businesses are encouraged to adapt this framework to better suit their specific contexts and strategic objectives. Understanding and applying this integration effectively empowers companies to tackle complex sustainability challenges, paving the way for innovation and leadership in their industries. By leveraging the SDGs as a guide to categorize and prioritize ESG efforts, businesses can ensure that their sustainability initiatives are not only impactful but also aligned with global objectives, enhancing overall business resilience and reputation. #sustainability #sustainable #business #esg #climatechange #climateaction #sdgs #impact #strategy

What's going to close the $7 trillion gap in climate finance? One of my favorite reports each year from Climate Policy Initiative has some ideas for scaling the investments needed to align with a net-zero pathway. To my mind, this is the best report each year on the state of climate finance. It shows you: -Where financial flows are going from (across public and private sources) -Where money is going to (in industry, location, and activity) -What our estimated needs are across sectors and regions -The mitigation potential to unlock across sectors -Strategies for scaling both public and private investment. Here's a look at the sector gaps we are seeing to date and how they can be overcome. Energy systems- need a 2.5-fold increase in mitigation finance to align with average 2024 to 2030 needs. This sector has the highest emissions reduction potential, requiring investment in renewables, grid modernization, and storage solutions. Transport- also requires an almost 2.5-fold increase in mitigation finance, alongside a significant shift away from high-carbon investments. With a mitigation potential of 3.2 GtCO2e, priorities include electric mobility, public transport expansion, and freight decarbonization. Buildings and infrastructure- mitigation finance must rise nearly 4-fold. This is sector is generally climate-aligned, but further investment can realize its 3.2 GtCO2e mitigation potential. Focus areas include efficiency upgrades, sustainable construction, and low-carbon heating and cooling. Industry- a nearly 24-fold mitigation finance increase, along with reallocation from high-carbon activities, is needed to tap the sector's 4.4 GtCO2e abatement potential. Key areas include clean hydrogen, low-emission manufacturing of cement, steel, and ammonia, and carbon capture, and storage. AFOLU- holds great untapped emissions reduction opportunities—mitigation flows should increase 64-fold from USD 18 billion to USD 1,170 billion annually through 2030 to realize this potential. There is also a need to improve definitional boundaries and enhance tracking of finance flows to this sector. Check out the full report here along with the data and dozens of interactive charts: https://lnkd.in/esqBmpfe #climatefinance #climateinvestment #netzero #decarbonization #climatepolicy #climateaction #emissions

📢 For the past 18 months I have been serving on a Government Taskforce - looking at how we can supercharge Women-led *High Growth* Businesses (inc. a few trips to Number 10 Downing Street)... 📈 This builds on much of the great work already started by The Rose Review & Rose Review Board which looks at *all* women led businesses, and the valuable data collection led by the British Business Bank, British Private Equity & Venture Capital Association (BVCA), Diversity VC Level 20 and The Treasury with the Investing in Women Code. This Taskforce was specific to *High Growth* Women-Led Businesses - and was led by one - the indomitable Anne Boden. Anne founded Starling Bank in 2014 and has since scaled it to 3.6m customers, £353m in revenue last year and £195m in profit.* She truly embodies the potential of High-Growth Women-Led Businesses and we need 10,000x more Starlings in order to power our economy forward. Being on this Taskforce was not without its challenges as the topics we're tackling are so vast and complex. I wish we had the time and resources to do much more. However - today we launch our (92 page!) final report, including recommendations on how to break down barriers and support the economy. The key recommendations are: Recommendation 1: Investors should better monitor the proportion of funding they invest in female founded businesses. Recommendation 2: Firms should set their own voluntary targets for the number of women in senior investment professional roles and report against them on their websites. Recommendation 3: Increase signatories to the Investing in Women Code, particularly for private debt funds and Limited Partners, to boost investment in women-led enterprises. Recommendation 4: Drive inclusive behaviour in the investment ecosystem. The FCA should reduce the threshold for companies below 251+ employees to incorporate venture capital firms to drive greater diversity in the companies and, thus, their decision making. Recommendation 5: Roll out Female Founder Growth Boards across England. Recommendation 6: Inspire girls and women to become high-growth entrepreneurs. Recommendation 7: Improve data collection on the number of female founders. Thanks to my fellow Taskforcers ●     The Chair, Anne Boden MBE, founder of Starling Bank ●     June Angelides MBE: Investment Manager, Samos, and CEO and Founder, Mums in Tech ●     Judith Hartley: former CEO of British Patient Capital and British Business Investments, British Business Bank ●     Zandra Moore: CEO and Co-founder, Panintelligence ●     Deepali Nangia, Partner, Speedinvest and Co-founder Alma Angels ●     Jan Putnis: Partner, Slaughter and May ●     Angela Scott: Founder, TC BioPharm Ltd ●     Helen Steers: Partner, Pantheon ●     Sam Smith: Founder and former CEO at finnCap Cavendish Group Plc I couldn't have been part of this Taskforce without support from Matt Penneycard the team at Ada Ventures. 🙏 *Figures at at March 23. Link below.

Two of the largest capital reallocations in recent months have been driven by sustainability. In March, a major UK pension fund moved $35bn from State Street to Amundi and Invesco in search of closer ESG alignment. This week, a Dutch pension fund withdrew €14bn from BlackRock for the same reason. More money flows are happening behind the scenes without making it to the news. These are not isolated moves but part of a wider rebalancing: European and Asian LPs are reshaping their portfolios around sustainability, especially as US asset managers face pressure from Washington’s anti-ESG stance to halt their sustainability programs. The political backlash in the US was meant to end sustainable finance. Instead, it is accelerating a structural trend that started long before President Trump’s election. Large fiduciary institutions under public scrutiny (pension funds, insurers) cannot ignore environmental and social risks without compromising long-term value. That is why the integration of sustainability is not a passing fad but the new investment baseline. History shows that market forces tend to outlast governments and their political agendas. Ironically, the US crackdown against sustainability has had one positive effect in Europe. By casting ESG as overreach and boosting the global competitiveness of the American economy, it has made Europe look foolishly over regulated, especially on the sustainability front. A much needed wake up call as ESG practitioners were facing the risk of letting compliance become an end vs. a mean to an end. The conversation is shifting back to fundamentals: sustainability not as a reporting exercise, but as a tool to strengthen corporate resilience and long-term competitiveness. This new capital flow is the latest evidence that sustainability has been redefining what investors expect from their managers. Can’t wait to see more news like this one, and excited to see the sustainability space coming to its senses and refocusing on value creation.

In 2025, sustainability won't sell itself. "Doing the right thing" won't get your project funded. If you're leading strategy, pitching a new line item, or defending impact budget you need a business case that speaks the language of finance, ops, and leadership. Here’s your cheat sheet. 6 proven angles to justify sustainability and real-world proof points to back them up: 💸 1. Cost Savings → Energy efficiency: Vodafone UK & Ericsson cut 5G power use by up to 33% at London sites. → Circularity: Patagonia’s Worn Wear turns repair into a revenue-positive loyalty loop. 📈 2. Revenue Growth → Trust drives sales: Compare Ethics' AI platform boosted brand revenue up to 1% through verified green claims. → Purpose = market share: Despite logo fatigue (only 4% of Brits trust them), verified sustainability builds buyer confidence. 🛡 3. Risk Reduction → Avoid fines and fallout: Align early with CSRD, ESPR, and rising global disclosure rules. → Resilience strategy: Mitigate supply chain and reputational risk before it escalates. 💡 4. Innovation Driver → Tech unlocks impact: Lufthansa, with SAP & McKinsey, cut costs and carbon by digitising spend and emissions data. → Efficiency gains: AI and automation create faster, smarter pathways to sustainability. 🤝 5. Customer & Talent Retention → Hiring edge: 1 in 10 job seekers prioritises sustainability in job descriptions. → Buyer behavior: 73% of EU consumers say environmental impact influences their purchases. 🌍 6. Capital Access → Investor alignment: 90% of global individual investors (per Morgan Stanley) want sustainability in their portfolios. Bottom line: Sustainability in 2025 isn’t a nice-to-have. It’s a performance driver and your business case needs to reflect that. 🔗 Want the high-res PDF + source links in your DM? ♻️ Reshare this post to help more teams build better business cases. 👤 Follow Abbie Morris

🔬 How To Measure UX Research Impact (+ PDF) (https://lnkd.in/etNUJEtx), an updated framework to define and measure UX research impact across UX, business, organization, engagement, structure and reach. Wonderful work by Karin den Bouwmeester. 👏🏽 Teams often struggle showing the actual value of research, and it's often very difficult to attribute business impact to initial research initiatives. Impactful research uncovers insights that are rooted in urgent problems and severe bottlenecks. The higher the urgency, the more visibility research initiatives will have. As Karin suggests, I would always start by exploring signals that something isn’t quite right and requires attention. For example: – Significant drop-offs in the funnel – Increased support tickets on a specific feature or flow – Low engagement with a newly launched feature – 2–4 star reviews citing UX issues – High abandonment after onboarding – Teams making assumptions without any data – Workarounds or shortcuts reported by users – Insights from sales and customer success teams – Analytics showing repeated navigation loops Karin suggests to measure UX research impact on 3 levels: Outcomes, Organizational Influence and Research Practice. --- 🔹 Level 1: Outcomes — What value does research create? We are exploring the business value, user value and societal value that research delivers. The question is how the work helps reduce risk, increase retention and support user's goals while reducing harm or bias. Example metrics: 📈 Order value ✅ Task success rate ❌ User errors ♿ Accessibility score --- 🔶 Level 2: Organizational Influence — Is research driving change? Often research gets stuck due to poor interest or low influence. We study if research findings are picked up and acted upon. If they shape strategy and inform roadmaps, and how engaged are stakeholders when it comes to research. Example metrics: 🧭 Product changes driven by research 📑 References to research in meetings/docs 📩 Number of research requests 👀 Number of observers in research sessions --- ♦️ Level 3: Research Practice — What are we doing and how? Here the question is how deeply research is embedded in day-to-day operations and product development cycle. We study how much research is happening, and when, and if it's a driver or an afterthought. Example metrics: 📊 Ratio discovery research / testing 📆 Studies per quarter/year 📁 Use of research templates We don’t have to measure everything at once. But we can start by measuring something impactful. We always try to locate bottlenecks with high visibility and high priority first, and focus on them. Even if they are internal and not customer-facing. It won’t always work, but it might help put UX research into a bright spotlight — and that could be a very good start. And a huge thanks to Karin den Bouwmeester for putting it all together! 🙏🏾 #ux #research

New paper, "Sustainable Investing: Evidence From the Field" (with Tom Gosling and Dirk Jenter). We survey 509 equity portfolio managers, of both traditional and sustainable funds, on whether, why, and how they incorporate firms’ environmental and social performance into investment decisions. 1. Both traditional and sustainable funds rank ES last out of six drivers of long-term value: below strategy, operational performance, governance, culture, and capital structure in that order. Clients interested in financial returns should not overweight a fund's ES credentials above its ability to assess these other factors. 2. This low relative ranking doesn't mean that ES is immaterial in absolute terms. Indeed, 73% of sustainable and even 45% of traditional investors expect ES leaders to deliver positive alpha. Unexpectedly, the most popular reason is that ES is a signal for other important value drivers rather than mattering directly. As I wrote in "The End of ESG", ES is "extremely important and nothing special". 3. ES performance influences stock selection, engagement, and voting for 77% of investors (66% traditional, 91% sustainable). Calls to "ban ES" make little sense as many traditional investors voluntarily incorporate it. 4. Only 24% of traditional and 30% of sustainable investors would sacrificing even 1bp of annual return for ES, citing fiduciary duty concerns. Policymakers and the public need to have realistic expectations of the asset management industry's likely ES impact. It will incorporate financially material ES factors, but it won't subsidize ES investments that offer below-market returns. That’s not because fund managers are greenwashing, but because they are fund managers. Their fiduciary duty is to their clients, whose goals are often financial. 5. But non-financial goals can be pursued through ES constraints such as fund mandates. 71% (61% traditional, 84% sustainable) report that ES constraints required them to make different investment decisions. These constraints sometimes reduced the very ES impact they aim to achieve, for example by preventing funds from investing in ES laggards whose performance they could have improved. 6. Overall, traditional and sustainable investors are more similar than commonly believed. Sustainable investors recognise fiduciary duty and are unwilling to sacrifice financial returns for ES. Traditional investors view ES as material and face ES constraints (firmwide policies, client wishes) preventing investment in "unsustainable" stocks. While some clients are attracted by sustainability labels, many traditional funds invest sustainably and many sustainable ones don't - and chasing a label can prevent true sustainable investing. Big thanks to the those who filled in the survey, beta-tested it, distributed it, and were interviewed. We hope that by directly involving practitioners, we can increase the relevance of academic research. https://lnkd.in/eGzRzE5t

For decades, climate action has often been framed as a choice: Mitigation to cut greenhouse gas emissions. Adaptation to help communities withstand worsening floods, storms, droughts, and fires. 💰 Yet, finance for adaptation has lagged far behind. Mitigation attracts most of the investment, while adaptation remains underfunded, leaving communities increasingly exposed to climate risks. But here’s the truth: this divide is misleading. Many solutions already exist that deliver both mitigation and adaptation benefits simultaneously. 🔎 A recent analysis of 300 adaptation investments found that over half also reduced emissions , often with economic value equal to or greater than their resilience benefits. 🌱 Whether it’s silvopasture that sequesters carbon while protecting farmers’ incomes, or mangroves that absorb CO₂ while shielding coastal communities, these are not “either/or” solutions. They are “both/and” — and they are urgently needed. 🚨 With global temperatures dangerously close to thresholds that will unleash even more severe impacts, prioritizing multitasking climate solutions is essential. They make limited finance go further, deliver co-benefits across sectors, and most importantly, improve lives while safeguarding the planet. 👉 Climate action must be designed to serve both goals at once. read the article by World Resources Institute 👇 https://lnkd.in/eMAvraRv

It's been an incredible 2 years working alongside some phenomenal women I now get to call friends. The task was to unpack the challenges faced by high growth women-led businesses, of which there are many. I won't dive into that, because we all know them. I would like, instead, to focus on the recommendations. There are 7 and they are all achievable. Recommendation 1: Investors should better monitor the proportion of funding they invest in female founded businesses. The Taskforce believes that by encouraging more investors to collect data on the proportion of funding they allocate to female-led businesses they will better target action to increase it. Recommendation 2: Firms should set their own voluntary targets for the number of women in senior investment professional roles and report against them on their websites. The Taskforce’s view is that increasing diversity of senior investment professionals will help increase investment in women-led businesses - venture capital firms with a female partner are more than twice as likely as firms without to invest in a company with a woman on the management team. Recommendation 3: Increase signatories to the Investing in Women Code, particularly for private debt funds and Limited Partners, to boost investment in women-led enterprises. The Code is a voluntary commitment from financial services to support female entrepreneurship. The Taskforce recommends an increased push to get private debt funds and Limited Partners to sign up to the code to increase the flow of funding to female founded businesses. Recommendation 4: Drive inclusive behaviour in the investment ecosystem. The Taskforce has submitted a response to the Financial Conduct Authority’s consultation on diversity and inclusion in the financial sector which includes a call to reduce the threshold for companies below 251+ employees to incorporate venture capital firms (most of which are SMEs), to drive greater diversity in the companies and, thus, their decision making. Additionally they have called for the requirement for companies to have a carers’ leave policy in place, as they view this as an important factor in returning talent and retaining gender diversity at senior levels. Recommendation 5: Roll out Female Founder Growth Boards across England. Almost 46% of the UK’s high-growth enterprises are located in London. The Taskforce believes this is due to easier access to funding, connections, knowledge sharing, talent, and customer base. They have created a ‘blueprint’ for regions outside London to replicate that environment. Female Founders Growth Boards bring together public and private sector stakeholders to create a pool of resources. The blueprint also includes a dashboard, collating data to highlight opportunities and monitor progress. Taskforce member Zandra Moore has already set up a Female Founder Growth Board in Leeds. The aim is for the blueprint to be self-perpetuating, being replicated by more cities across England.  

Investing in a Changing Climate: Climate change presents two major financial risks for #investors, transition and physical risks; together, these risks accelerate the devaluation of #assets, potentially rendering them stranded long before the end of their expected lifecycles. 🔹 Transition risks—driven by rapid policy shifts, evolving market behaviors, and technological innovations—impact industries beyond fossil fuels, including real estate, automotive, agriculture, and heavy industry. 🔹 Physical risks—such as extreme weather, rising sea levels, and prolonged heat stress—can disrupt supply chains, reduce worker productivity, and devalue assets. A delayed transition brings hidden risks—while some sectors (utilities, basic resources) may see short-term relief, they face sharper, more destabilizing corrections when policy action eventually accelerates. Using NGFS climate transition scenarios (Baseline, Net Zero 2050, and Delayed Transition) alongside Discounted Cash Flow (DCF) and Interest Coverage Ratio (ICR) valuation methods, we identify sector-specific vulnerabilities across the US and Europe. 📉 Sectors at risk under a Net Zero 2050 scenario: 🔹 Real estate (-40% in Europe) due to energy efficiency mandates and rising costs. 🔹 Telecommunications (-26.3%) and consumer staples (-24.8%) facing stricter carbon regulations. 🔹 Energy (declines of -6% to -7%) as fossil fuel operations become costlier. 🔹 Basic resources (-11.9%) and technology (-11.7%) showing relative resilience but still facing policy-driven adjustments. 📈 Sectors showing resilience across scenarios: 🔺Technology & Healthcare remain stable due to innovation and lower emissions intensity. 🔺Consumer discretionary in the US (-16%) sees moderate declines but adapts through renewables and supply chain shifts. A well-orchestrated transition is critical to minimizing financial shocks. Scenario-based risk assessments allow investors to safeguard portfolios, mitigate stranded asset risks, and capitalize on opportunities in the green economy. #ClimateRisk #NetZero #SustainableFinance #ESG #Investing #ClimateTransition #RiskManagement #AllianzTrade #Allianz