The latest developments in the sustainability space.

Rathbones
Sustainable and ESG funds are set to take a greater share of client portfolios over the next year, according to research commissioned by UK wealth manager Rathbones. Almost nine in 10 (87 per cent) of IFAs, discretionary fund managers (DFMs) and private wealth fund selectors surveyed are anticipating this increase.

Of those expecting allocations to rise, 61 per cent anticipate a slight increase, while 26 per cent expect a significant rise.

The research also shows that sustainable and ESG-integrated funds are already embedded in many standard model portfolios, with four in five holding between 11 per cent and 25 per cent. However, relatively few (3 per cent) have allocations above this level, suggesting that there is still scope for further growth.

The research was commissioned by Rathbones Group, via independent research agency PureProfile, to interview 100 UK IFAs, discretionary fund managers and private bankers and investment fund selectors at large banks during July 2026.

Despite political pushback against ESG in the US and continued global market volatility, appetite for sustainable investments has increased over the past 12 months, the research shows. More than half (54 per cent) of respondents have experienced a slight increase, while 5 per cent said the increase has been significant. Just 3 per cent have seen a decline, while 38 per cent report no change.

“The findings suggest fund selectors are looking through the short-term noise around ESG and continuing to focus on the long-term role sustainable investments can play in client portfolios,” David Harrison, head of sustainability, Rathbones Asset Management, said.  “While market conditions and political debate have made the backdrop more complex, demand is still being supported by clients’ desire for credible, well-managed strategies with clear processes and demonstrable stewardship.”

Active stewardship, including voting and engagement, is an important factor when selecting a sustainable or ESG fund for 94 per cent of IFAs, DFMs and fund selectors. For 15 per cent, active management is the primary reason for selecting a fund.

Respondents also see a role for active managers in supporting real-world outcomes, such as lower carbon emissions, improved health and reduced resource use. Almost all (95 per cent) said active strategies can play an important role. Almost two thirds (64 per cent) believe that active strategies are more likely to deliver better outcomes, while almost a third (31 per cent) strongly believe this is the case.

“For many fund selectors, active stewardship is becoming a key test of credibility,” Harrison added. “Voting and engagement give managers a way to demonstrate how they are using their influence on behalf of clients, rather than simply offering exposure to a sustainable theme. In a more scrutinised market, that distinction matters.”

Refame Venture, British Business Bank, UK Private Capital
Reframe Venture, the British Business Bank and UK Private Capital are launching a new ESG reporting template to harmonise engagements between general partners and UK institutional limited parters with venture capital investments.

The template selects information that is material to VC and growth-stage businesses. It creates a common set of metrics for reporting request, reducing the chores of fund managers and portfolio companies. It also provides access to more consistent and comparable information for institutional investors.

The new template fits with metrics in the ESG Data Convergence Initiative (EDCI), Invest Europe’s ESG Reporting Template, and the Principle Adverse Impacts (PAIs) of the Sustainable Finance Disclosure Regulation (SFDR). 

Sustainability is central to a growing share of fund strategies within the private capital industry. At least £128 billion ($171 billion) was raised by funds managed by UK Private Capital members aligned to (SFDR) Articles 8 or 9 or equivalent between 2021-2025, a statement from the organisations said.  

The groups cited a report finding that 26 per cent of UK startups measure their carbon footprint compared with 23 per cent in Europe and only 8 per cent in the US.

“This template marks an important step forward to ensuring impactful and proportionate ESG reporting and reducing unnecessary burden on firms,” UK Private Capital CEO Michael Moore, said.