As 2024 draws to a close, it becomes a time for reflection on the year’s developments and predictions for the coming year. So, within PA Future‘s end of year series New Era, members of the sustainable investment community will be doing just that, as well as sharing some eco-friendly Christmas hacks and the one thing they want to see under the tree this year to accelerate the transition.
Here, Nuveen’s Sasha Miller, head of responsible investment strategy for EMEA and APAC, is the first to answer our questions detailing the expansion of the firm’s impact platform, views on SDR success so far and the curve balls expected to be thrown up in the new political landscape.
What was the most sustainable investment initiative your team undertook in 2024?
While we have had a number of key milestones globally, the launch of our Global Credit Impact UCITS was a particular highlight and it closely coincided with our lead investment in the Amazon Reforestation Bond, adding to a growing list of sustainable finance innovations and industry firsts (eg rhino bonds, orange bonds, blue bonds, debt for nature swaps).
Were there any unexpected challenges or triumphs in your sustainability journey this year?
One of the most pleasing developments this year was driving the extension of our impact platform through the application of the Operating Principles for Impact Management — building on our established fixed income and private equity practices and extending to affordable housing, direct lending, C-PACE and potential new areas such as nature-based solutions.
SDR has been rolled out to the UK funds market. How has this adopted within your business? Has this been a positive development?
We are supportive of any initiative which allows for greater transparency, investor information and high standards. As a global manager, we have been assessing SDR alongside other RI regulations to continue to optimise our client solutions. As with all regulation, investor protection is vital and ensuring a consistent delivery across markets and players. We look forward to working with clients, regulators and the wider industry to continue this journey.
What do you predict will be the biggest trend in sustainable investment in 2025? Are there any emerging sectors or trends you are particularly excited about?
We are seeing increased interest across our global client base for nature positive solutions and we’re working on nature positive investing across assets classes. There is a growing consensus that over the next decade the top risks will be nature related, and around two thirds of investors intend to increase their investments in this space. At the same time, there are new opportunities in environmental markets, growth equities and innovative fixed income structures. Our proprietary research has indicated that half of the global credit market for example is highly exposed to nature risk. So, both the opportunity and need is clear as we move into 2025 and beyond.
How do you think global events or economic shifts might influence sustainable investing next year?
There are clearly significant macro forces at play. Next year will also be a milestone year as we approach a five year countdown to 2030 – the year the agenda for Sustainable Development Goals (SDGs) was envisioned to be implemented. The financing gap to achieve the SDGs remains significant and so the opportunities to drive more blended finance opportunities and public/private partnerships will continue. We remain focused on the fundamentals and the undeniable opportunity for investors across the RI and impact spectrum, with an immense amount of capital already in motion related to the energy transition, generational wealth transfer and regulatory opportunity.
What are the top challenges sustainable investment teams will face in 2025, and how will you tackle them?
Although the political landscape could throw some curve balls our way, for us, the biggest challenge, or opportunity rather, will be to continue to educate the market on all that sustainable investing has to offer across all asset classes. Moreover, as it is still an incredibly crowded market, the ability to innovate will be a challenge for many players. We have a strong track record of innovation in the space from our impact bond strategies to climate inclusion to affordable housing to our number one position in farmland investing globally.
If you could set one new industry standard or regulation in 2025, what would it be?
Harmonisation across geographies – balancing investor protection and supporting much needed capital flows to drive the sustainable transition.
What’s the most eco-friendly Christmas hack you’ll be trying this year?
I am taking inspiration from Japan this year, and will be using some modern ‘furoshiki’ to wrap my presents this year. The practice, which comes from traditional silk or cotton gift wrapping but now using cheaper, recyclable materials, is quickly becoming a popular environmentally-friendly alternative to single-use wrapping paper.
What’s the one thing you’d love to see under the tree to help accelerate sustainability in 2025?
At the risk of a shameless plug, our global head of responsible investment Amy O’Brien is publishing a book in early 2025 entitled A Field Guide to Responsible Investing. While it might not hit the shelves quite in time for my Christmas tree this year, it promises to be a thrilling read with not only a unique perspective of the history of the RI landscape from a pioneer who has been there since the start, but also some compelling myth busting of the issues that have dominated the headlines over the last few years.
