Member Insight: Navigating the next stage of the transition

As investors navigate an increasingly complex transition landscape, practical guidance and robust investment approaches are becoming more important. In this member Insight, Jan Erik Saugestad, CEO of Storebrand Asset Management, reflects on IIGCC's impact and the role investors will play in the transition. 

Over the past decade, climate considerations have moved from the margins of investment decision-making into the mainstream. As investors increasingly focus on implementation and real-world outcomes, practical frameworks, stewardship and industry engagement have become essential to navigating the transition.

Turning commitments into action

One of the biggest challenges facing investors has been translating climate commitments into practical action. In our experience, IIGCC has played an important part in helping investors bridge that gap.

IIGCC has helped develop practical frameworks for investors navigating the net zero transition, supporting more consistent approaches to implementation across the industry. This has helped investors move from ambition to implementation.

Most notably, the Net Zero Investment Framework (NZIF) has been widely adopted. It has provided practical guidance on integrating transition planning, target setting and stewardship into investment processes, helping investors embed climate considerations into day-to-day investment decisions rather than treating them as a standalone sustainability issue.

Equally important has been access to practical insights and examples that help investors keep pace with a rapidly evolving climate landscape.

The role of stewardship and engagement

Looking back, one of IIGCC's significant contributions has been supporting investors to strengthen their stewardship and engagement practices.

Engagement initiatives have supported investors in exercising their stewardship responsibilities and encouraging progress on governance, climate disclosures and emissions reduction targets among some of the world's largest emitters.

Beyond company engagement, IIGCC has played an important role in mainstreaming climate-related financial risk management and stewardship across the European investment community. Its evidence-based guidance has also informed investor perspectives in climate policy discussions at both national and international levels.

More recently, IIGCC's integration of nature-related considerations into its work reflects growing recognition that climate and nature are interconnected investment considerations.

Why climate matters to investors

Climate change is now widely recognised as a material financial risk. Its impacts extend well beyond environmental considerations, influencing asset values, economic stability and long-term portfolio performance.

Institutional investors have a responsibility to understand and manage both the risks associated with the transition to a low-carbon economy and the physical impacts of climate change. The transition also presents opportunities in clean energy, electrification, resource efficiency and climate adaptation.

Addressing climate-related risks and opportunities is therefore no longer a sideline activity. It is increasingly central to investment management and long-term value creation.

Staying focused in a changing world

Investors are operating in an increasingly complex environment. Geopolitical tensions, evolving regulation and differing regional transition pathways can create uncertainty for investors.

This is where organisations such as IIGCC continue to play an important role in helping investors navigate uncertainty. By providing evidence-based guidance, IIGCC helps investors maintain focus on long-term value creation amid short-term complexity.

IIGCC’s role in providing guidance, research and practical tools remains as important as ever. As expectations around credible transition plans and real-economy decarbonisation continue to rise, the need for clear implementation approaches and credible transition planning is likely to increase.

The next decade: from ambition to outcomes

Looking ahead, the role of institutional investors will continue to evolve, with a growing focus on implementation and measurable outcomes. Stewardship is likely to involve greater scrutiny of transition-plan credibility, capital allocation and policy engagement.

Investors will also need to better integrate climate considerations with broader sustainability challenges, including nature loss and social resilience. Addressing these interconnected risks will require new approaches and deeper integration of sustainability considerations into investment decision-making.

Addressing systemic climate risks will require continued investment in climate solutions and effective management of transition and physical risks across portfolios. Success will depend on the industry’s ability to accelerate investment into climate solutions while supporting an equitable transition.