ESG briefing: Brussels is back in session

As regulators rethink climate requirements, asset owners continue to grapple with the question of how much of the job of upholding standards should realistically fall to investors and what counts as credible climate investing.

Asset owners have again been coming up against the tension between regulatory changes and political scrutiny.

Last week, European pension funds said they will keep collaborating on climate risk, despite a warning from the US Securities and Exchange Commission (SEC) to investors involved in Climate Action 100+ (CA100+).

Rikke Berg Jacobsen, chief of ESG at AkademikerPension, told IPE that the US backlash against ESG investing has not changed the fact that climate risk is financial risk.

“Being part of Climate Action 100+ does not mean others decide how we vote or act,” she said. “So, no, we are not going to step back just because responsible investment has become more politically controversial.”

On 7 October, the SEC published a report expressing “serious concerns” about how certain CA100+ members behaved around ExxonMobil’s 2021 annual general meeting (AGM).

In the UK, investor expectations clashed with regulators. The Financial Conduct Authority (FCA) has said it plans to make its climate-disclosure rules more flexible than first intended. The move saw industry groups speak out against the UK regulator’s proposal to drop mandatory climate reporting.

The Net-Zero Asset Owner Alliance (NZAOA), whose 85 signatories include AkademikerPension, ERAFP, Allianz and Folksam, has called on private market managers to adopt net zero strategies despite policy uncertainty.

In Brussels, the debate over transition categories went on last month, when Members of the European Parliament (MEPs) signed off on a provisional negotiating position for the Sustainable Finance Disclosure Regulation (SFDR).

Over in France, Caisse des Dépôts (CDC) will stop providing new debt financing to oil producers, with an exception for eligible green and sustainable bonds, under its updated climate policy.

The restriction will apply to companies such as TotalEnergies from January 2027. The policy specifies non-renewal of corporate bonds.

Items to note:

• The IPE Conference & Awards 2026 is taking place on 2 December at the Royal College of Physicians & Natural History Museum in London.
• A new paper from Aberdeen Investments finds that investor interest in sustainability is stronger than headline industry data suggests. Governance, transparency and business standards are now among the clearest drivers of investment preference.

Krystle Higgins

Sustainable Finance Correspondent