### The Future of Sustainable Investing: Trends and Challenges

Sustainability is gaining unstoppable momentum despite recent setbacks in emissions targets and greenwashing fatigue.

### The Shifting Landscape of Sustainable Investing: Challenges and Opportunities
* ✈ Air New Zealand has notably **scrapped its 2030 emissions target**, marking a significant shift among major airlines regarding **sustainability commitments**.
* 🌍 Shell has also revised its climate targets while planning to expand its gas business, reflecting a broader trend of companies **dropping or missing emissions reduction goals**.
* 📉 The past year has seen a **decline in the momentum for sustainable investing**, raising questions about whether this trend has **peaked amid global uncertainty and volatile markets**.
* 📊 The majority of the economy remains non-green, indicating that **sustainability is a long-term structural change** rather than a quick fix, with progress often marked by "**many kinds of small booms and busts**."
* 🔄 Historical milestones, such as the **Paris Agreement in 2015**, have spurred acceleration in sustainability efforts, but current challenges suggest a **potential slowdown before another phase of growth**.
* 💰 The transition to sustainable practices is argued to be **costly for businesses and consumers**, yet many companies are still innovating to create **profitable new business models**.
* 🛑 Fatigue over greenwashing and the complexities of sustainability have contributed to a sense of stagnation, but the emergence of **clearer standards** is helping to **restore trust and enthusiasm** in sustainable investing.
* 🚀 Despite the ups and downs, sustainability is now considered **essential in investment decision-making**, and its momentum is deemed "**unstoppable**," indicating a **promising future for the sector**.

Air New Zealand has scrapped its 2030 emissions target, the first major airline...
Shell revises climate targets as it plans to keep its gas business growing…
...In the past year, many have dropped or missed goals to cut emissions
or to loosen ties with polluting sectors...

In recent years, sustainable investing
seemed to be everywhere. The issues commanded the news cycle,
companies set targets, investors discussed ESG,
nations and firms alike pledged to reach net zero.
But in the context of volatile markets,

a year of elections and global uncertainty,
is the honeymoon over? Has sustainable investing peaked?
The overwhelming majority of the economy
as of today, is not green. When we talk about sustainability,
it's actually something that is unfolding at a structural level
over the course of many, many years,

actually many decades.
For instance, in the way we conduct economic activity,
if you were to just plot mid-19th century to 2050,
it's a linear function. But of course it's not.
There's many, many kinds of small booms

and busts along that conversation.
So back to my point about sustainability, there are times of acceleration
where policy moves forward: signing of the Paris Agreement in 2015,
the agreement that was achieved around fossil fuel
in Dubai during COP28.

And in other instances, of course,
backlash and conversations that go the other way around.
And I really wouldn’t be surprised that moment of slowdown
is followed by an acceleration. It just so happens that it's
not a linear transition.

So what is this moment of slowdown caused by? There's been an argument that the transition is actually going to be very costly, not just in terms of we need to deploy a lot of capital, but those upfront costs are also going to cost to

businesses and to consumers, because prices will increase. There's been some very, very high-profile businesses and companies that have actually gone backwards. But I mean, we're still seeing tremendous growth in many businesses, that are actually pursuing new business models as a way to generate revenues,

generate profits, and redistribute those profits to their investors. So it’s two steps forward, one step back, essentially? I think we reached peak fatigue a couple of years ago because it was such a mess. I think there was also fatigue with greenwashing.

What has changed massively, actually, in the last couple of years is that now we are starting to have many different standards. So we're starting to get to a point where there's a level playing field and an understanding around what it means to be green,

what it means to be sustainable, what it means not to be sustainable. That has in some ways revived enthusiasm and trust as well in the system. We've been an investment house for many centuries. And it so happens that now sustainability, we think

is incredibly material to investment decision making. I mean, it's gathered so much momentum, but the momentum is such that it cannot be stopped. It's unstoppable.

Has Sustainable Investing Peaked? | FT Rethink

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Financial Times

Air New Zealand dropped its 2030 emissions target.

Shell revised its climate targets while maintaining its gas business.

Many companies have missed or abandoned emission reduction goals.

The current state of sustainable investing

Sustainable investing was prominent but faces challenges due to market volatility and global uncertainty.

The majority of the economy isn't green; sustainability is a long-term structural change.

Economic activity isn't linear; there are periods of acceleration and slowdown in sustainability efforts.

The transition to sustainability is costly, impacting businesses and consumers.

Some companies have faced setbacks, but others are thriving with new sustainable business models.

Peak fatigue and greenwashing concerns contributed to the slowdown.

Development of standards is creating a level playing field and clearer understanding of sustainability.

Sustainability is crucial for investment decisions.

The momentum towards sustainability is unstoppable.