First, happy new year to our ESG newsletter readers.
It’s been a relatively quiet start to the year from a sustainable finance news perspective, but there’s plenty in store, from responses to the European Commission’s proposed overhaul of the Sustainable Finance Disclosures Regulation (SFDR) – a feedback window closes on 27 February) – to wrangling over the review of the IORP II Directive, which includes some surprise sustainability-related elements. The biggest EU sustainability projects won’t be focused on finance, though.
It’s not just about regulation, of course, and we will continue to bring you news about asset owners’ investment approaches regarding climate change and other threats to sustainable development. Climate indices are one area of change, and last week we brought you news of Switzerland’s Migros Pensionskasse dropping its Paris-aligned benchmark due to the tracking error and underperformance. It has switched to a bespoke MSCI Climate Action index.
In 2025, Donald Trump and US Republicans’ campaign against shareholder rights and ESG investing continued, with proxy advisers one of the main market players coming under attack.
In mid-December, a major executive order targeted ISS and Glass Lewis, and last week JP Morgan Asset Management announced it would cut all ties with proxy advisers and move to an in-house, AI-driven voting tool, a move that the Securities and Exchange Commission (SEC) looks to be on board with.
And earlier in December, an official from the SEC suggested that investors who vote in line with proxy advice could be classified as activists under regulation. The comments suggest the regulator will continue to have appetite to use accusations of collaboration as a means of clamping down on shareholder rights. This and the decisions taken by sustainable finance collaborations during 2025 leave portfolio companies themselves looking like the ones undertaking the boldest sustainability collaborations going into 2026.
On the proxy voting theme, one development that is generating some debate is pass-through voting. As explored by IPE, it is an approach that is gaining traction (although still only affecting a small part of the market), but opinions are divided on whether it will improve stewardship.
For researchers Tom Gosling and Suren Gomtsian at the London School of Economics, the time is right to establish a set of best practice principles, from clarity of purpose to communication and transparency.
Items to note:
- IPE’s Transition Conference & Awards 2026 will take place on 22 April at The Hague.
Susanna Rust
ESG Editor
This news briefing was published earlier in the week. If you would like to receive it regularly, on your IPE profile, go to My Newsletters and select any from the list.
