January 2026 Newsletter
Top ESG and sustainability news for January 2026.
NYC Comptroller to review predecessor’s approach to climate mandates
Newly elected New York City Comptroller Mark Levine is reviewing predecessor Brad Lander’s proposals to drop BlackRock, Fidelity, and PanAgora from city pension mandates over weak climate strategies. Levine reaffirmed a strong climate stance, pledging to hold managers accountable through shareholder proposals, vote-no campaigns, and potential litigation. He also plans to allocate up to 2% of pension assets toward affordable housing investments, aligning housing and climate goals while maintaining risk-adjusted returns. The review signals continuity in NYC’s push for sustainable investment and active stewardship.
JPMorgan eases defence exclusions across 129 funds
JPMorgan Asset Management is lifting defence‑sector investment exclusions across 129 UK and European funds, reflecting rising client support for defence preparedness. Effective 16 February 2026, the change affects UK ESG funds, Luxembourg Article 8 funds and Ireland‑domiciled Article 8 ETFs. The firm will remove conventional‑weapons exclusions, loosen rules for exposure to issuers involved in nuclear‑weapons programmes within the Nuclear Non‑Proliferation Treaty, and ease certain fossil‑fuel restrictions. JPMorgan says the shift aligns with evolving client expectations and new EU regulatory clarity. The move follows a broader industry trend, with other major asset managers relaxing defence exclusions amid geopolitical tensions.
Investors warn: deforestation is a systemic financial risk
Fifty‑one global investors, representing over USD 4.5 trillion in assets, have signed the Belém Investor Statement on Rainforests, warning that deforestation poses a systemic financial risk. The statement calls for urgent, enforceable forest‑protection policies and an end to tropical deforestation by 2030. Investors highlight that forest loss destabilises climate systems, biodiversity, and global supply chains, creating material financial risks from stranded assets to regulatory uncertainty. The collaboration signals rising investor pressure for stronger regulation, transparency, and integration of nature‑related risks into investment and engagement practices. Read more here.
New ESG ratings regimes aim to boost transparency and trust
The UK and EU are introducing parallel regulatory regimes for ESG rating providers to improve transparency, consistency and market integrity. Both will require providers to obtain regulatory approval, with the UK’s FCA focusing on transparency, governance, conflicts of interest and stakeholder engagement, while the EU’s ESMA emphasises methodology and disclosure. Although broadly aligned, the regimes differ in scope, definitions and authorisation routes. The UK consultation runs until March 2026, with the regime live from 2028. The EU framework is already in force, with full implementation due in July 2026. Overall, both aim to strengthen confidence in ESG ratings and their role in investment decisions. Read more about these here.
Quantifying the impact of sustainability in value creation
Sustainability is increasingly recognised as a driver of value creation, with LPs seeking clearer evidence of its financial impact. While many managers still struggle to quantify this link, new tools from the PRI, NYU Stern and recent analysis from Stanford and BCI highlight both the opportunity and a path forward. Research from BCI’s $25bn PE portfolio shows that disciplined ESG integration can enhance EBITDA, reduce risk and grow enterprise value. Case studies across logistics, manufacturing and insurance demonstrate material gains. The research also identifies five guiding principles to embed ESG into private equity value creation: define ESG in commercial terms, tailor by context, quantify impact, integrate across the deal cycle and build conviction through results. Read our full article on this topic here.
If you’d like to know more or discuss any of these topics please get in touch.
Further Reading
