A recent survey of institutional investors by State Street Global Advisors, The Climate Opportunity, underscores the varying implementation of sustainable investing across asset owners, many of whom have differing views on the topic. Therefore, it may be crucial for asset owners to partner with asset managers that can offer bespoke approaches, helping them meet their individual investment needs and objectives.

The survey reveals that when considering climate-related factors, the majority of EMEAbased asset owners surveyed are most concerned by the investment risk it poses, more than its potential real-world impact, stakeholder preferences, and regulatory requirements. This emphasis on risk is consistent across all types of investors surveyed, from pension funds to sovereign wealth funds. Our survey shows that more than 80% of asset owners surveyed have assessed and modeled the impact of different climate risks on their portfolios — a process that is often expensive, timeconsuming, and complex. However, many investors face significant challenges in implementing strategies with sustainable investment objectives. The current market, dominated by index provider-led solutions, offers off-the-shelf products that may not fully address the specific risks exposed by this process. This misalignment between investor needs and available solutions suggests the market needs to further evolve to meet the growing demand for sustainability integration. As a result, institutional investors must carefully select an asset manager who can truly understand their unique perspectives and can facilitate the implementation of their sustainability objectives effectively.

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