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, head of responsible investment at Royal London Asset Management, and member of the PA Future Committee, Ashley Hamilton Claxton
What was the most sustainable investment initiative your team undertook in 2024?
While not solely a sustainable initiative, our acquisition of 21,000 acres of prime farmland was a very exciting project. Although it’s only a small part of our assets, it was one of the largest property transactions in the UK. It was our first investment in agriculture and natural capital, and we have lots of exciting sustainability initiatives planned for this asset.
Were there any unexpected challenges or triumphs in your sustainability journey this year?
I know I won’t be the only one saying that SDR has been a challenge. We didn’t think it would be an easy implementation, but it ended up being much more complicated than many originally thought. Some of the challenges in navigating the naming and marketing rules were a surprise.
One exciting triumph was my team being selected as one of two internal teams to take part in a ‘hackathon’ competition finale. As a result, a cross-functional team will be trying to build a new proof of concept piece of technology to help us track our company engagements better. We built some technology a few years ago, but we have lots of ideas on how to make it better.
SDR has been rolled out to the UK funds market. How has this adopted within your business? Has this been a positive development?
Overall, the SDR regulation will be positive in providing more transparency and disclosure, but I think it has been much more challenging, and costly, for the industry than originally planned. it’s great to see more funds getting approved now, which will help make sure there is a viable and healthy market for sustainable funds in the UK.
See also: Will we ever get perfect data and does it even matter?
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?
I think transition funds will continue to be an important trend in the market next year. I expect to see some more changes in these funds as the EU firms up the rules around naming conventions, but overall, this is welcome. I think there is more and more investor appetite to invest in these funds.
Having been involved in the Investor Commission on Mining 2030 and as a board member of the Initiative for Responsible Mining Assurance (IRMA), I would say mining is a particularly interesting and challenging sector.
The minerals are needed for the energy transition, but mineral production often happens at the expense of the environment and communities. If we can make mining much more responsible and accountable to stakeholders, then I think it will be an interesting area for sustainable investors to think about.
How do you think global events or economic shifts might influence sustainable investing next year?
The rise of populism will have a significant impact next year. It is a reminder to me that sustainability always needs to be approached in a holistic way, considering the interplay, impacts and trade-offs between the E, the S and the G. Concepts like the ‘just transition’ and a new one we’ve coined – ‘just adaptation’ – are now more important than ever. If we can’t solve the social and financial inequalities many people face, it will be difficult to build the political will to help solve the long-term systemic challenges of climate change and nature loss.
What are the top challenges sustainable investment teams will face in 2025, and how will you tackle them?
I would say the biggest challenge will be navigating some of the political noise and staying focused on some of the most impactful actions we can take to help our clients and tackle sustainability issues. Navigating the various regulatory rules will continue to be a challenge next year. I also think we’ll dig deeper into nature and biodiversity, which is infinitely more complex than climate.
If you could set one new industry standard or regulation in 2025, what would it be?
I would be asking Santa for a one-year pause on new sustainability regulation so we can all catch our breath!
What’s the most eco-friendly Christmas hack you’ll be trying this year?
We’ve recently installed solar panels and a battery in our house, so I’ll be hoping to use the sun to power some of our holiday season cooking. With the shorter days, this is a bit more of a challenge, so I’ll be hoping for a sunny Christmas instead of a white one.
What’s the one thing you’d love to see under the tree to help accelerate sustainability in 2025?
I’ll be encouraging my son to pack up a bag of old toys, books, and clothes that he wants to donate to charity. We’ll put them under the tree on Christmas eve for Santa to take to families to be re-used and re-purposed.
