Sustainability: Outlook 2026
December 2025 | Katherine Roach
Throughout 2025, we maintained a strong focus on embedding ESG, active stewardship, sustainable solutions and corporate sustainability across our investment processes.
In a year marked by geopolitical uncertainty and shifting industry narrative, we believe our commitment to ESG integration within our investment processes remained central to driving long-term positive outcomes for clients.
One of the main conversations we have been having with clients and investors over the course of 2025, and expect to see continue through 2026, surrounds our approach to sustainability and responsible investment. Clients are keen to understand how we apply our policies, build our investment process methodologies and meet our commitments. We have had discussions on driving real-world impact with clear, consistent and tangible goals beyond just meeting regulatory requirements and industry expectations. Investors continue to challenge on robustness of processes, effective stewardship and the quality of ESG data to support investment decision making.
GAM has focused on setting realistic and credible targets to support the generation of sustainable long-term positive returns across our product range. Our aim is to demonstrate to clients that we do what we say we do. We look to communicate clearly and transparently when it comes to describing our investment processes across teams and how we integrate ESG within our decision making. We believe the application of responsible investment practices such as exclusions driven by relevant legislation, market requirements, client demand, and market review continues to play an important role. In Q3 2025, we published our consolidated GAM Exclusions Policy, introducing a simplified tier-based approach and fund classifications, to improve clarity around our approach to exclusions, and their application across our strategies.
What qualifies as a sustainable investment?
Topics including defence spending, nuclear energy and resilience financing have been debated through 2025 with discussions heating up on what qualifies as a sustainable investment. We have seen increased expectations on investors to provide robust due diligence to support investment decision making. While the business case for responsible investment remains strong, 2025 has taught us that this is a continually evolving landscape as standards rise, regulations mature and knowledge improves, and we need to ensure we have scalable frameworks and proportionate flexibility to adjust to change.
The role of AI
The positive role that AI could play in climate change and advancing sustainability practices will be a focus as we head through 2026. The challenge will be leveraging AI to support sustainability gains and long-term growth while also balancing the potential environmental costs associated with the rapid uptake in its use. AI could prove a powerful tool in helping investors assess and continue to monitor portfolios alongside improved data analytics and reporting. As active managers, we must collaborate with regulators to ensure responsible governance of AI tools.
Shifting sustainability regulations
Regulatory shifts in 2026, with a focus on simplification and accountability, could reduce costs and complexity while improving transparency and investor trust. We hope to see more innovation, competitiveness and operational efficiencies, opening doors to new investment opportunities.
As we move into 2026, Sustainability is evolving from over-engineered targets and unrealistic commitment into a discipline focused on real progress, risks management and alpha generation.
Strong investment rationales, clear methodologies and robust governance frameworks will be key to supporting clients through another eventful year for responsible investment.
Katherine Roach is the Global Head of Sustainability & Investments Business Management at GAM Investments.