ESG and wealth, plus the Omnibus

Wealth and the evolution of ESG

In 2013, The Wealth Report highlighted the rise of hands-on philanthropy, including impact investing and venture philanthropy. Fast forward to today, and this trend has accelerated significantly. Over a quarter of the 150 family offices surveyed for the 2025 edition, released yesterday, have invested in climate and environmental sustainability, with a further 42% planning to do so. Among younger generations, this trend is even more pronounced, with 55% of the under 35s surveyed as part of our Next Gen questionnaire already investing and the remainder looking to follow suit.

This year's report, delves into how ESG has evolved, particularly through its integration into property investments. Notably, 28% of the family offices surveyed have invested in solar power generation, while 24% have focused on improving the ESG performance of commercial properties. Looking ahead, renewable energy provision is the most sought-after category, with 29% exploring opportunities in battery storage investment and 22% in solar power generation.

Interest in nature-based solutions is also gaining momentum. Rewilding made its first appearance in the 2019 edition of the report, followed by carbon farming in 2021. This year, 27% of family offices are looking to invest in environmental credits, with 10% already doing so - up from 21% exploring nature-based solutions and 19% in carbon sequestration last year. The report also examines the concept and valuation of “vintage carbon”, offering deeper insights into the intersection of wealth, sustainability, and nature. For this, I spoke with Rich Stockdale of Oxygen Conservation, and also featured on their Shoot Room podcast.

Explore the full report here, including top ESG investment picks from around the globe.

Wealth on the move

A recurring theme in The Wealth Report is the mobility of wealth and wealthy individuals, which is now intersecting with environmental considerations.??Residency or citizenship-by-investment programmes have evolved, with some now addressing climate change directly. For instance, the tiny island of Nauru is now offering passports to beat climate change and fund its Higher Ground Initiative, aiming to raise US$65 million to relocate 90% of its population. The passport provides visa-free access to 88 destinations, including the UK, Singapore, and Hong Kong, according to Henley & Partners. Similarly, Dominica's programme, which offers visa-free access to 144 destinations, states that applicants must actively support initiatives to reduce carbon footprints, enhance renewable energy capabilities, and preserve biodiversity for future generations.

More broadly, environmental considerations are influencing travel and experiences. While 55% of Next Gen survey respondents value international travel and see it as worth investing in, their approach is shifting toward more sustainable options. Over half (53%) now seek eco-friendly travel alternatives, such as choosing trains over planes for business or leisure. This trend is mirrored in the corporate world, with 40% of European companies implementing sustainable business travel guidelines, including restrictions on domestic flights and the introduction of carbon budgets.

For Next Gen wealth, when choosing a destination there are a number of factors at play. Just under half (49%) are seeking opportunities to connect with nature and 38% look for Green Michelin or sustainable restaurants. Locations across Europe may be a draw on both fronts. Connectivity with new luxury train routes, and the continent is home to 581 (as at the end of 2024) restaurants with Green Michelin status, half of all global restaurants with this accolade - France (with 16%), Germany (13%), Italy (12%) and Spain (10%) were among the hotspots

Following up on last month's newsletter

Navigating the evolving ESG landscape is increasingly complex, but its critical role is widely recognised. Asset owners managing over ￡1.2 trillion in assets recently made a statement on climate stewardship and 92% of CFOs plan to continue investing in sustainability through 2025. These aren’t just signals as The People’s Pension – who led the statement – pulled ￡28 billion from State Street due to its public retreat from ESG.

In the UK, momentum is evident: the net-zero economy outperformed in 2024, growing by 10% in Gross Value Added (GVA) and employment, according to research by the Energy and Climate Intelligence Unit (ECIU) and CBI Economics, three times faster than the broader economy.

This economic shift has implications for real estate, influencing occupier demand and space requirements and this could continue at pace. Research by Oxford Economics and The Tony Blair Institute highlights both opportunities and challenges in the UK's green economy. Their best-case scenario projects the green economy—defined more narrowly than the net zero economy—could grow from 0.8% of GDP today to nearly 6% by 2050, supporting 1.2 million jobs.

Green finance and green insurance are identified as the top sectors by potential value, with the UK already highly competitive in these areas. Maintaining this edge is crucial. In February, the City of London Corporation and HM Government co-launched the Transition Finance Council to solidify the UK's leadership in green finance. Other high-potential industries include carbon capture, use and storage (CCUS), fixed offshore wind, and green infrastructure services such as civil engineering, operations, and maintenance.

Omnibus or deregulation?

The other key development was the EU ‘Omnibus’ of ESG-related regulation. What was dubbed a simplification has evolved to a loosening of regulation. The EU's aim to reduce the administrative burden on companies, particularly smaller ones, and ensure the regulations remain practical and effective - finding the balance between ambitious sustainability goals and competitiveness.

The most notable proposals, which must go through EU Parliament, include the Corporate Sustainable Reporting Directive (CSRD) applying to companies of more than 1,000 employees, previously 250, and turnover of €450 million, previously €40 million. Subject to the final approved legislation, this is said to have reduced the number of corporates in scope by 80% - similar changes are to be applied to EU Taxonomy reporting requirements as well as materiality thresholds of 10% for financial market participants and 25% for non-financial – based on KPIs such as turnover or operational expenditure.

The changes proposed to the Corporate Sustainability Due Diligence Directive (CSDDD) limit requirements to direct suppliers, with assessments required every five years. Companies are also no longer allowed to request information beyond the CSRD requirements from direct partners with fewer than 500 employees. However, large companies still fall under these requirements. While they can no longer formally request information from smaller suppliers, they still retain the ability to choose who they work with based on their sustainability requirements. So, some impacts may still filter through the supply chain via voluntary compliance from smaller companies – even if to a more limited extent. In addition, many companies that were previously expected to comply may have already begun aligning processes and may still see merit in continuing to do so to future-proof themselves – both legally and for procurement.

The knock-on effect from large corporates feeding through to their supply chains will likely continue – The People’s Pension example above shows just how important ESG policies can be in attracting and retaining customers. Ultimately, market forces and stakeholder expectations will continue to drive ESG considerations, even if regulatory requirements are adjusted.

Nicola Ryan's stat of the month - 9.1 million

London’s population has hit 9.1 million, set to surpass 10 million within the decade, pushing it into megacity status —but can its infrastructure keep up? With data centres alone consuming 1.7 GW by 2026 and a 20% increase in energy supply needed by 2050, grid constraints are already stalling housing projects. Meanwhile, 2.9 million sq ft of office space risks obsolescence under tightening ESG regulations, yet prime, energy-efficient offices are in critically short supply. Discover more insights from the London Series here.

What else I am reading

The seventh Climate Change Committee Carbon Budget – read more of my take here, agrivoltaics tech could see land-use v solar debate removed, JPMorganChase, one of the wall street banks to recently exit the Net Zero Banking Alliance, released the first of a new series called Climate Intuition. The report, authored by the bank's Global Head of Climate Advisory,? Dr. Sarah Kapnick (former Chief Scientist at the U.S. Department of Commerce, National Oceanic and Atmospheric Administration (NOAA)), notes "Success in the new climate era hinges on our ability to integrate climate considerations into daily decision-making. Those who adapt will lead, while others risk falling behind."??On the other side, HSBC delays net zero targets by 20 years, it now expects to record a 40% drop in emissions across its operations, business travel and supply chains this decade, and BP rows back on renewables.