Stephanie Pfeifer, IIGCC CEO, outlines the topics that will likely feature heavily in discussions this year, highlighting how its strategy is designed to help members address current and future challenges.
We are just a few weeks into 2025 and already it is clear that this will be a challenging but interesting year for investors addressing climate risk and opportunity. That said, it’s important to acknowledge where we are and how far we’ve come.
Generally, climate change and its asset level and systemic impacts are now well understood. For investors, including our more than 400 members, climate-related physical risks and transition risks represent financial risks, and must therefore be considered as part of their duties to clients and beneficiaries.
How they navigate this fast-changing world is up to them, but as a future-facing organisation, IIGCC is here to help.
Investors operate across jurisdictions and must balance varying sentiment in markets – but they too expect Europe to lead on climate.
Diverging policy landscapes and climate diplomacy, net zero implementation and a race for new opportunities all represent new or evolved challenges in 2025, together with emerging requirements on nature.
In our annual report and recent AGM, I set out four strategic priorities which are designed to be fit for the future, addressing investor challenges on the horizon as well as those today. With those in mind, here are a few areas I expect to feature heavily in discussions this year.
1. Europe’s leadership challenge
In 2019 the European Union set the standard for others to follow with Fit for 55, committing to cut 55% of its greenhouse gas emissions by 2030, building to net zero by 2050. Now, much like our investor members, the EU must manage this implementation in today’s complex and competitive geopolitical landscape.
Challenging as this is, there remains an enormous chance for Europe to lead and innovate, demonstrating and harnessing the opportunities presented by the transition. The EU 2040 emissions target is a chance to reiterate this ambition and maintain leadership status.
Investors operate across jurisdictions and must balance varying sentiment in markets – but they too expect Europe to lead on climate. As a nimble European organisation with strong relationships in Brussels, we intend to remain at the forefront of this conversation, keeping our members ahead of the curve and sharing their feedback with policymakers.
Despite the ups and downs of electoral cycles and geopolitical events, the economic shift is happening.
2. Support for climate strategies
For investors managing climate risks and opportunities, including those committed to net zero, the hard work is well underway in line with their individual duties to clients and beneficiaries. Supporting investors in implementing their climate strategies will be central to our work.
This will include more practical, specific guidance such as the Physical Climate Risk Assessment Methodology and Net Zero Investment Framework, as well as reiterating the importance of engagement at the asset and policy levels. On the latter, the road to COP30 will be key.
At the asset level, through our membership, investors can now participate in five engagement initiatives which together focus on more than 270 companies whose transition is essential to net zero. We set out to raise ambition when co-launching these initiatives, which we continue to lead in Europe, and now we look ahead to new developments.
3. Competition intensifies
Despite the ups and downs of electoral cycles and geopolitical events, the economic shift is happening. Be that in the rapid growth of electric vehicle adoption, in the climate solution technologies such as solar and wind which offer cost-savings and self-sufficiency, or in the transition finance needs of sectors and states.
One of the defining topics of this decade is the investment opportunity as economies explore and embrace these new capabilities at scale. Our role is to help our members navigate this new normal within the context of their individual strategies and transition plans.
4. From Baku to Belém
Climate finance commitments at COP29 fell well short of the sums required. However, the Baku to Belém roadmap now represents a window for private finance to engage with policymakers on how best to scale up finance for emerging markets and developing countries. The current and upcoming Presidencies must deliver the roadmap at COP30 in Brazil.
Making Nationally Determined Contributions (NDCs) more investable will be key. There is a clear urgency to redirect capital flows towards climate solutions and adaptation and resilience efforts in emerging markets and developing countries. To succeed, public and private must work together to address the barriers that hinder investment today.
5. The climate-nature nexus
A focus on nature will gain momentum this year, building on 2024 which saw record levels of investor interest including at the Biodiversity COP16 in Colombia. Deforestation will be at the centre of this nexus as understanding of related risks and opportunities expands.
Our initiatives can help members as they expand awareness and engagement to meet this demand, including Nature Action 100, which we lead in Europe, and in our role as Secretariat of the Finance Sector Deforestation Action (FSDA). The first Nature Action 100 Company Benchmark offers a public baseline to inform engagement.
As a European organisation focused on the future challenges facing our members, IIGCC will continue to be at the forefront of this fast-changing space, offering guidance, tools, forums and frameworks to help equip our members as they navigate this new normal.
We look forward to working with you all as the transition gathers pace in this seminal decade.
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