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Sustainability powered investing

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ESG in action across investment processes to deliver long-term value

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Realistic targets, transparent communication and robust oversight

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Future-ready thinking: Scalable frameworks, evolving exclusions, and AI-driven insights

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.

Katherine Roach

Global Head of Sustainability & Investments Business Management
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Important disclosures and information
The information contained herein is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained herein may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information contained herein. Past performance is no indicator of current or future trends. The mentioned financial instruments are provided for illustrative purposes only and shall not be considered as a direct offering, investment recommendation or investment advice or an invitation to invest in any GAM product or strategy. Reference to a security is not a recommendation to buy or sell that security. The securities listed were selected from the universe of securities covered by the portfolio managers to assist the reader in better understanding the themes presented. The securities included are not necessarily held by any portfolio nor represent any recommendations by the portfolio managers nor a guarantee that objectives will be realised.

This material contains forward-looking statements relating to the objectives, opportunities, and the future performance of the U.S. market generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio’s operations that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involve a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of GAM or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made.

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