How understanding market dynamics and research led insights help us guide clients through a fast-evolving responsible investment environment.
At glance
- Atitudes towards responsible investment (RI) continue to shift. We witnessed a significant upswing in the early 2020s followed by a period of substantial challenge
- Despite headwinds sustainability remains a major macroeconomic trend. Navigating a diverse global landscape requires understanding of increased complexity and regional variations
- Columbia Threadneedle’s approach is anchored around two pillars – the incorporation of material sustainability risks/opportunities into analysis and the provision of dedicated sustainability funds and solutions
- Deep understanding of market dynamics and research into related themes position us to help clients navigate the fast-evolving RI roadmap.
Navigating an evolving landscape
In the decades since the origins of responsible investment (RI), we have witnessed many shifts in market attitudes, but none quite as dramatic as in recent years. The early 2020s marked the most significant upswing in momentum to date, followed by a period where RI has faced substantial challenge.
The surge in interest was propelled by broader political and social catalysts: amongst them, the 2021 Glasgow climate summit, which sparked a wave of new Net Zero commitments; and the COVID-19 pandemic, which underscored the importance of public health, and highlighted humanity’s interconnectedness and vulnerability. The period also saw introduction of a range of new sustainability regulations, particularly in Europe and Asia.
However, several challenges have emerged since this time. Regulators have responded to instances of greenwashing by implementing stricter scrutiny, making companies and investors more cautious in their claims. Organisations have expressed mounting concerns about the costs of complying with regulations, especially in Europe. And we have seen a growing divergence between different regions of the world in regulatory and political approaches.
These changes have influenced corporate and investor attitudes. Some companies have scaled back their sustainability targets, particularly where these had outpaced government policies, and others have adjusted their communications to respond to the political climate.
However, this recalibration doesn’t signal the end of RI. Sustainability remains a major macroeconomic trend. Companies continue to pursue initiatives where they demonstrate clear financial and commercial benefits, and sustainability-linked regulation continues to move forward in many parts of the world. With a more diverse global landscape, however, navigating the increasing complexity and regional variations in policy requires a sophisticated understanding of the underlying value drivers.
Columbia Threadneedle’s approach to these challenges reflects our decades of experience in RI. Our commitment transcends market cycles, steering a steady path based on two fundamental pillars: incorporating material sustainability risks and opportunities into our investments; and providing dedicated sustainability funds and solutions.
Incorporating material sustainability risks and opportunities: We see companies’ interconnectedness with people and planet as foundational to long-term business growth. The firm leverages its Research team and broader responsible investment expertise to identify material sustainability themes, and engage purposefully with companies. The box gives examples of how we are implementing this in practice.
- Providing dedicated sustainability funds and solutions: We maintain and develop funds, mandates and solutions for clients with a range of sustainability requirements. This includes $60 billion in mandates and funds with specific sustainability objectives, and the reo engagement overlay service, with $591 billion in assets under engagement (as at March 2025).
Our steady approach, grounded in decades of experience and a deep understanding of market dynamics, positions us to help clients navigate the changing RI roadmap, whilst always maintaining our focus on long-term performance.
