A new study by Isio has found that despite political pushback against ESG in the United States, asset managers are continuing to ‘raise the bar’ for sustainable investing.
Isio’s 2025 Sustainable Investment Survey, which examined over 140 funds managed by around 65 asset managers, found that almost all (97%) have established ESG policies and have sustainability teams in place.
Its research evaluated ESG integration across asset classes, exploring developments in investment approach, risk management, stewardship, reporting and collaboration, using Isio’s proprietary Sustainability Integration Assessments (SIAs), and found ‘strong progress’ being made at firm level.
However, the evaluation also revealed some inconsistencies in how ESG is embedded, evidenced and disclosed at fund level.
‘Holding firm’
“It’s encouraging to see that progress on sustainable investing continues, even in the face of a wider ESG backlash, particularly in the US,” commented Cadi Thomas, head of sustainable investment at Isio. “Most firms are holding firm on their commitments, and we’ve seen positive steps forward in areas like reporting and risk management, which are key foundations for long-term integration.
“At the same time, there’s still significant work to do at fund level. Disclosures remain inconsistent, particularly in private markets, and while climate reporting has improved, social and nature-related data continue to lag. Fewer funds are adopting formal ESG objectives, potentially driven by increasing labelling scrutiny. This shift suggests a more cautious approach, likely in response to growing regulatory pressure.”
The study comes as the UK Department for Business and Trade is undertaking a review of Sustainability Reporting Standards.
Asset management
As Isio’s research found, more and more asset managers are committed to the UK Stewardship Code (69% in 2025 vs. 65% in 2024) and net zero plans (65% in 2025 vs. 58% in 2024). However, participation in the Net Zero Asset Managers Initiative (NZAMI) has declined from 63% in 2024 to 57% in 2025, which Isio attributes partly to political pressures in the US.
Reporting practices have advanced, Isio added, with over two-fifths (41%) of funds now aligned to the Taskforce on Climate-related Financial Disclosures, including Scope 3 emissions. However, formal ESG objective-setting has decreased, with 39% of funds adopting such objectives in 2025, down from 49% the previous year.
“With sustainability reporting now firmly on the Government’s agenda, now is the time to take stock and ensure strategies can stand up to increasing scrutiny,” Thomas added.
Isio is an independent pensions, investment, employee benefits and wealth consultancy that was formed in 2020, following the sale of KPMG UK’s Pension Practice to a private equity firm. Read more here.
