Sustainability

US Investor Sustainable Finance takeaways: Closing the reality vs. perception gap

30 Oct 2025 . 3 min read

Over the past week, several of our colleagues met with leading global asset managers and private equity partners, in a series of sustainable finance focused meetings, representing a combined ~$21trn in assets under management (AuM) for asset managers. The tone was very constructive, with the appetite for sustainability aligned strategies remaining much stronger than the overriding tone.

Below are five key themes that emerged across the meetings:

1. Closing the reality vs. perception gap

A leading global asset manager has surpassed $1 trillion in sustainable AuM, emphasizing that sustainability integration is entirely client led. Their internal framework positions sustainability as a tool for material risk and return analysis.
A North American insurer highlighted that firms continuing to advance ESG integration during quieter market cycles will be better positioned competitively when sentiment rebounds. Their outperforming Net Zero Target Bond Fund was cited as a case in point.
A sustainability-focused investor noted that while ESG branding may be less prominent in some US equity contexts, physical climate risk integration remains core to its analysis, underscoring a deeper commitment than headlines suggest.

2. Strong demand for labelled products and constructive views on Greenium

Multiple global asset managers expressed active interest in GSS (green, social and sustainability) bonds, with particular focus on social themes such as healthcare, education and managed care.
One investor showcased leadership in blue financing, actively looking at opportunities focused on marine-based projects.
Several investors indicated openness to modest Greenium, reflecting continued demand for labelled products.

3. Transition finance momentum

A private equity firm flagged that policy incentives have created a renewables bubble, accelerating buildout through 2028.
A global insurer is focused on data centres and their pending energy requirements, which are being integrated into private debt analysis.
Another asset manager shared their internal energy transition outlook, anticipating continued solar and wind upscaling through 2028, interim reliance on LNG, and growing momentum for nuclear in the post-2028 energy mix.

4. Resilience and adaptation are emerging as strategic investment themes

A North American insurer is actively exploring adaptation and resilience strategies, particularly in private markets and noted that insurance pricing still fails to reward adaptation, creating a market gap.
A global asset manager flagged growing investor interest in physical climate risk, especially in sectors like REITs and telecoms, viewing resilience framing as more effective than traditional ESG language in the US.
A sustainability investor emphasized that resilience integration continues even where ESG terminology is being downplayed, suggesting that adaptation is becoming a mainstream risk lens across asset classes.

5. Climate stress testing and ESG data infrastructure are becoming core to strategy

A global insurer has completed climate stress tests across public corporates and equities, identifying gaps in NGFS scenarios and emphasizing the need for better geospatial and supply chain data.
A leading asset manager’s climate analytics platform now integrates over 15k+ ESG KPIs, enabling portfolio teams to assess physical risks like wildfire exposure across infrastructure and real estate portfolios.
Another insurer performs private asset carbon accounting internally using PCAF, citing greater accuracy than vendor data. This reflects a broader trend toward centralized emissions infrastructure and internal tooling to meet regulatory and client expectations.

Want to know more?

If you want to discuss any of the themes raised, please reach out to one of our specialists:

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Sustainable financing and facilitation represents only a relatively small proportion of NatWest Group’s overall financing and facilitation activities. Details of our financing and facilitation activities and associated emissions can be found in the NatWest Group – 2024 Sustainability Report (sections ‘Estimates of financed emissions’ (p.41) and ‘Estimates of facilitated emissions from bond underwriting and syndicated lending’ (p.45))

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