Sustainability agenda – Capital and solutions for real-world issues

Talking Heads podcast with Jane Ambachtsheer

Andrew Craig: Hello and welcome to this week’s BNP Paribas Asset Management Talking Heads podcast. Every week, Talking Heads will bring you in-depth insights and analysis through the lens of sustainability on the topics that really matter to investors. In this episode, we’ll be discussing sustainability. We’ll look back at the main events in 2025 and then ahead to the developments and trends we anticipate this year. I’m Andy Craig, Co-Head of the Investment Insight Centre and I’m joined today by Jane Ambachtsheer, who’s Global Head of Sustainability at BNP Paribas Asset Management. Welcome, Jane, and thank you for joining me today.

Jane Ambachtsheer: Thanks for having me.

AC: If we start by reflecting on last year’s key investment industry events such as the COP30 climate summit in Brazil or the Principles for Responsible Investment In Person conference, what were the major takeaways for investors?

JA: It’s a great time to be thinking about the big trends, the emerging opportunities and the challenges that we’re navigating on behalf of our clients, whether it’s responding to climate imperatives, regulatory shifts or the evolving market dynamics.

We can start with COP30.  It was widely described as the implementation COP and really meant to shift the focus away from negotiating new commitments to delivering on the climate pledges and scaling the solutions to achieve what’s already been set out. After two weeks of intense negotiations, there was no common view on an outcome, but there were some key outcomes in a few specific areas. Indicators to track the global goal of adaptation exist, but financing the implementation needs to be determined.

The focus around nature-based solutions was important and the flagship announcement was the launch of the Tropical Forest Forever Fund with almost 7 billion committed and endorsements from over 60 countries. The TFFF aims to raise 25 billion from government sponsors and attract an additional 100 billion from the private sector in a structure where countries can invest in forests and earn returns rather than relying on grants. So, that’s a promising development, but clear pathway around fossil fuel phase out will have to wait.

One important element given the geopolitical context is that COP 30 showed us that multilateralism and cooperation still exist amid deglobalisation and shifting priorities in many countries. This was encouraging. Although the outcome falls short of what is needed, given the urgency of tackling climate change, it was positive to see this continued cooperation.

AC: Jane, last year saw a growing backlash against sustainability. Do you believe that interest in sustainability is declining and with it in sustainability related investing? How have investors reacted?

JA: You’re right, it has been a challenging environment for sustainability. Some markets are clearly experiencing strong scepticism and pushback around sustainability and ESG integration. But I wouldn’t go so far to say that it’s a global backlash. It’s really a more nuanced situation.

Overall fund flows have generally been flat, and we can highlight a number of specific trends in Europe. For example, we can see that many pension funds and other long-term asset owners have strongly maintained their focus on sustainability. Many have reaffirmed the significance of addressing climate change with the launch of the Asset Owner statement on climate stewardship, where they ask asset managers to raise the bar on what they’re doing, which is directly in response to the pullback that we’ve seen from some managers.

We can also observe some asset owners implementing more sophisticated elements into their portfolios such as incorporating biodiversity considerations alongside climate-related strategies and beginning to tackle new topics such as responsible AI in Asia Pacific.

We’re seeing encouraging progress among many asset owners in Japan, Singapore, Hong Kong, mainland China. In Singapore, for example, we can look at the work of the Monetary Authority of Singapore where we’ve seen tremendous leadership with MAS creating partnerships to catalyse capital deployment towards clean energy and the energy transition, to enable regulatory processes across the region and fostering education and training on a range of sustainability topics.

We can look at Morningstar’s 2025 Asset Owner survey where we had the majority of respondents in Asia Pacific and Europe highlight that ESG has become more material to them over the last five years.

AC: What would you say are the most significant trends that investors should monitor closely in 2026?

JA: This year, investors are looking to understand and address a number of societal and systemic sustainability challenges. Our clients want to see evidence of the outcomes of the work that we’re doing, whether it’s around engaging with policymakers, engaging with companies, really kicking the tyres and making sure that transition plans being put forward by companies are credible and in place.

There are a number of different areas that we’re focusing on. Demographics is an important one and looking at demographic shifts, significant levels of inequality, pressures on human capital, human rights and public health, all of these challenges are driving demand for more inclusive and resilient systems. And while this is complex, such issues can lead to the possibility for investment opportunities.
Demographic changes including urbanisation, ageing populations and inequality are emerging as social investment themes that require capital solutions to tackle them.

When we think about innovation and technology, we know that these topics bring risk and opportunity. The responsible deployment of AI and stronger cyber resilience are critical. AI can be a powerful enabler of sustainability-related solutions, offering different tools and opportunities to tackle environmental challenges. We know that AI can help investors and companies to better embed ESG insights into decision-making, enhancing transparency and identifying long-term opportunities.

AC: Jane, where do we stand on the energy transition? What are your views on financing the transition in the years ahead?

JA: A good place to start is the International Energy Agency’s 2025 Energy Outlook. We can see that renewable energy sources are increasingly satisfying the growing demand for electricity, often because they represent the most cost-effective choices. Solar power remains at the forefront, particularly in countries experiencing surging energy requirements such as India. Alongside solar, a range of technologies are gaining ground, with emerging innovations like advanced geothermal energy beginning to make their mark.

If we come back to China as an example, China’s electrification rate is already way above the global average, and this will be amplified as we continue to move forward. This energy transition is having substantial implications on the energy landscape and China’s oil and coal consumption are expected to be substantially impacted by the energy transition even in the short run.

If we step back and take more of a macro perspective, we can see that investment in clean energy has outpaced investment in fossil fuels for a number of years already, with a ratio of 1.8 dollars spent on clean energy for every dollar spent on fossil fuel investment. We’ve seen good progress, but we have a significant road ahead of us.

AC: We’ve covered a lot of ground today and as we wrap up, could you summarise for us the main messages that investor should take away for 2026?

JA: Our clients expect not just exposure to sustainability themes, but resilient portfolios backed by credible sustainability reporting and tangible outcomes that align with long-term sustainable returns. We’re committed to translating the different macro trends that I’ve talked about into investment strategies that will be effective for clients.

AC: Thank you, Jane. It’s been great having you and we’ll look forward to talking to you again before too long. That’s it for this week’s episode of Talking Heads. If you’d like to learn more about our sustainability strategies or our investment insights, please reach out to your BNP Paribas Asset Management contact or check out Viewpoint, our website for investment insights at viewpoint.bnpparibas-am.com. We recommend subscribing to Talking Heads on your favourite podcast channel such as YouTube or Spotify. You’ll receive your podcast episodes every week. If you like Talking Heads, please leave us a positive review and a nice rating. You’ve been listening to the BNP Paribas Asset Management Talking Heads podcast with me, Andy Craig, and Jane Ambachtsheer, Global Head of Sustainability. Please do join us again next week. Until then, take care.