Insights

Decoding California’s climate mandates

The $4 billion paradox: when responsible investing discovered defence

Maria Merry del Val, Director – ESG and Responsible Investing For years, defence spending sat firmly outside the remit of responsible investment. Now, that boundary is blurring. The very sector once synonymous with exclusion lists is now attracting billions in sustainability -labelled funds, creating a paradox that investors can no longer ignore.

ESG due diligence highlights covering Q1 and Q2 2025

Amita J, Practice Lead, ESG Due Diligence; Kumail Haider, Global Head of Due Diligence; Amita Jain, Lead of Due Diligence APAC; and Joris Olde Rikkert, Lead of Due Diligence UK. Our latest ESG due diligence work shows clear momentum across deals in the first half of 2025. In this period, we delivered 87 assessments, added to a total of more than 1,000 over the past 15 years, and identified over 430 opportunities for value creation. Our global coverage extended across the UK, Europe, North America, Latin America, and Asia, with each review aligned to client needs and leading ESG frameworks.

The limits of one-size-fits-all sustainability rules

The European Commission sought to simplify sustainability reporting. Instead, it may have created a bigger challenge.

Sustainability-linked lending: a market dividing into two clear paths

The sustainability-linked lending market has delivered over €300 billion in annual issuances for five consecutive years reflecting its importance in corporate finance (ING, 2025). The financial benefits for borrowers are clear: sustainability-linked structures can lead to reduced interest rates and improved access to capital. According to a recent report by Bain & Company and the Principles for Responsible Investment (“PRI”), sustainability-linked lending is a key driver of sustainability-linked value creation. At exit, it contributes to 6% in value increase of private market assets, reinforcing the business case for ESG integration (PRI, 2025).

Why accuracy and auditability matters in ESG reporting

ESG reporting has changed how businesses convey their value to the world, going from being a nice-to-have endeavour to a basic business necessity as it has become clear that the accuracy and auditability of ESG data are not only technical demands; they are the cornerstones of long-term corporate performance.

Solving the data coverage challenge in ESG: A three-pronged approach

ESG data plays a vital role in the financial markets but due to its complex nature, the industry still experiences challenges when it comes to data coverage. We believe solving this challenge requires consistency, collaboration, and innovation. Data coverage can be improved through the following methods outlined here.

Sustainability gets standardised: The ISSB rollout unpacked

The announcement of the International Sustainability Standards Board (“ISSB”) at COP26 in Glasgow in November 2021 marked a turning point in global sustainability efforts.

Reframing the role of AI and big data in sustainability reporting

The increasing complexity of sustainability disclosures reflects a broader shift in the global business environment. No longer confined to optional narratives in annual reports, sustainability data has become a critical factor in risk management, investment analysis, and long-term strategic planning. As this transformation unfolds, artificial intelligence (“AI”) and big data are emerging not simply as tools for operational efficiency, but as drivers of a fundamental change in how knowledge is gathered and applied. They are reshaping how companies collect, interpret, and act upon non-financial data.