18 March 2026
3 min
The sustainability landscape continues to evolve, shaped by regulation, market practice and changing investor priorities. With this, expectations for asset owners, investment managers and companies are also changing. In our inaugural monthly sustainability blog, we aim to bring clarity by focusing on the developments we believe have the greatest relevance for investors.
The Net Zero Asset Managers initiative (NZAMi) has officially relaunched with an updated framework. Its signatory base has consolidated to around 250 firms — down from a peak of 325 — as the coalition navigates an increasingly contentious landscape. The update includes a revised commitment designed to preserve alignment with global net zero objectives while addressing the political headwinds that led to the initiative’s pause. While the new framework places greater emphasis on flexibility and manager discretion, the continued absence of many large firms is notable, particularly those headquartered in the US.
Some asset owners have already expressed disappointment at the absence of several high-profile firms from the initiative. While involvement in collaborative initiatives can be a useful signal of intent—and we are supportive of manager participation—it is ultimately an asset manager’s tangible actions that matter most. This is a primary focus of our responsible investment (RI) Ratings framework, which assesses managers on implementation rather than affiliation. For more detail on our approach, please speak to your usual consultant.
The UK government has announced the release of the finalised UK Sustainability Reporting Standards (UK SRS), based on the sustainability and climate-related standards developed by the International Financial Reporting Standards (IFRS) Foundation. While the government endorsed the standards for voluntary use, it left the door open for future mandatory application of the climate and sustainability disclosure frameworks.
Since 2021, FCA-regulated asset owners and DWP-governed occupational pension schemes have been required to report under the TCFD (Task Force on Climate-related Financial Disclosures) framework. Although the Sustainability Reporting Standards are not currently mandatory for occupational pension schemes, asset owners should seek to understand how the reporting landscape is evolving and how this could affect them over time. The broader reporting regime is likely to be reviewed this year, so asset owners should look out for, and participate in, consultations on sustainability reporting to ensure that reporting remains proportionate.
Late last year, the EU clarified that investors using its Paris-aligned and Climate Transition benchmarks were only required to exclude the “prohibited weapons” list of chemical and biological weapons, cluster munitions and anti-personnel mines. This baseline focuses on items universally banned by international treaties, but many asset managers maintain broader "controversial weapons" policies to manage reputational risk. These expanded lists often exclude companies involved in nuclear weapons, white phosphorus, blinding lasers, or weapons with non-detectable fragments. Recently, the consensus on controversial weapons has been fracturing, with many asset managers relaxing exclusions—most often to allow investments in firms involved in nuclear weapons manufacturing and support. Meanwhile, a significant ethical and regulatory challenge is emerging with AI-driven autonomous weapon systems. While the EU AI Act generally exempts military use, the European Parliament and UN continue to call for a ban on Lethal Autonomous Weapon Systems (LAWS) that could use force without human oversight.
While companies with ties to controversial weapons make up a very small (<1%) proportion of global indices, their reputational risk is significantly outsized. We recommend asset owners review the policies of the funds they hold to ensure their investments are aligned with their principles.
If you’d like to discuss these developments or explore how we can support you, please get in touch.
This blog is based upon our understanding of events as at the date of publication. It is a general summary of topical matters and should not be regarded as financial advice. It should not be considered a substitute for professional advice on specific circumstances and objectives. Where this blog refers to legal matters please note that Hymans Robertson LLP is not qualified to provide legal opinion and therefore you may wish to obtain independent legal advice to consider any relevant law and/or regulation. Please read our Terms of Use - Hymans Robertson.
We pride ourselves on being thought leaders and are constantly discussing the many issues facing and shaping our industry. Sign up to find our current thinking on topical issues.
Opens in new window Subscribe
