Risk, Return and Responsibility

The Hidden Reason US Pensions Still Back Fossil Fuels

Risk, Return and Responsibility - Episode 10 What if doing the responsible thing with your pension wasn’t about values at all - but about returns, risk, and reality?  Risk, Return and Responsibility, former UK Pensions Minister Guy Opperman and Chris Hall, Editor of Asset Owner Network, sit down with Alex Wright‑Gladstein, Founder and CEO of US fund provider Sphere, to unpack one of the most misunderstood forces in modern finance: why almost all US pensions still fund fossil fuels, and why this is a fiduciary failure, not a moral choice.  Alex explains how a system designed decades ago now traps trillions of dollars into outdated assumptions, why climate‑friendly investing has been framed as “financially irresponsible”, and how lawsuits, not performance - quietly dictate where retirement money flows.  This conversation goes far beyond ESG buzzwords. It’s about risk, power, incentives, and who really decides what “prudent investing” means.  If you’ve ever been told you have to choose between returns and responsibility, this episode challenges that idea entirely.    What You’ll Learn  * Why most Americans want climate‑aligned investing - but think they’re alone  * How pension fiduciary law in the US actively blocks innovation  * The lawsuit culture shaping what can and can’t appear in retirement plans  * Why fossil fuels have been one of the worst‑performing sectors for decades  * How excluding fossil fuels can actually reduce long‑term risk  * The uncomfortable truth about shareholder voting and conflicts of interest  * Why the ESG backlash wasn’t grassroots - and who funded it  * What a climate‑friendly index fund must do to survive regulatory scrutiny  * Why “doing nothing” with pensions is still an active choice    Stand‑Out Quotes  “You don’t have to choose between doing good and doing well - that choice was manufactured.”  “Most people don’t know what ESG means - but they know they’re worried about their future.”  “The default option quietly decides the fate of trillions of dollars.”  “Climate risk is financial risk. The law just hasn’t caught up yet.”    Why This Episode Matters  Pensions are the largest pool of long‑term capital in the world - and most people never realise where their money ends up.  This episode exposes:  * How systemic risk is ignored by design  * Why default funds matter more than individual choice  * How incentives shape markets far more than intentions  It’s not a debate about politics or ideology.  It’s a conversation about reality, responsibility, and the future we’re accidentally funding.    Who This Episode Is For  * Pension trustees & asset owners  * Policy makers & regulators  * Institutional investors  * Anyone with a pension who’s never been asked what it supports

Risk, Return and Responsibility – Episode 9: Reaching Common Ground on Natural Capital

In this episode, Rebalance Earth’s Rob Gardner explains why institutional investors must view nature as "living infrastructure" to mitigate systemic climate risks and secure long-term, performance-linked returns. Risk, Return and Responsibility — the monthly podcast from Sustainable Investor — provides institutional asset owners with the news and views shaping the sustainable investment landscape and our wider economic and social systems. Recorded in the first week of March 2026, this episode features former UK pensions minister Guy Opperman and Sustainable Investor Editorial Director Chris Hall in conversation with Rob Gardner, CEO and Co-founder of Rebalance Earth. Gardner discusses his own transition from traditional investment consulting to becoming a "natural capital champion”, arguing that restoring nature is a matter of economic self-interest. The discussion delves into how nature-based solutions can outperform engineered alternatives in managing physical climate risks, while also delivering returns to institutional portfolios. With reference to several of Rebalance Earth’s own projects, it outlines how capital flows for nature protection and restoration can be unlocked through aligning shared commercial interests, but does not shy away from the complexity of working with multiple parties, and the need for greater public-private understanding – and action - common challenges. Guests * Rob Gardner: CEO and Co-Founder of Rebalance Earth * Guy Opperman: Former UK Pensions Minister and host * Chris Hall: Editorial Director of Sustainable Investor Interview Highlights * Nature as Living Infrastructure: Gardner argues that nature restoration must be viewed through the lens of economic self-interest and "team Earth's" resilience rather than mere philanthropy or altruism. By framing nature as "living infrastructure", it becomes clear who benefits from its maintenance, crystalising payment flows and ultimately investment returns. Biological assets, such as oyster reefs, can be viewed as performing infrastructure that provides high-value services, including water purification, marine biodiversity restoration, and cost-effective coastal defences. * Performance-linked Returns: One promising investment model being pioneered by Rebalance Earth focuses on ‘payments for ecosystem services’, where corporate off-takers like Nestlé Purina pay for specific outcomes such as cleaner water and marine biodiversity restoration. This creates a financial return that flows back to pension funds, such as the West Yorkshire Pension Fund, based on the reef's performance. * Addressing Systemic Risk: Gardner notes that peak rainfall in the UK has increased fivefold since 2010, posing a systemic threat to property and infrastructure. He argues that asset owners should allocate 2–5% of portfolios to natural capital to enhance the resilience of the physical assets — such as homes and railways — that their members rely upon. Such investments can provide a “natural hedge” for portfolios that are at risk from the physical risks of climate change at a time when information on adaptation actions across major asset classes is scarce. * The Evenlode Project – Scaling Up: The podcast highlights the latest stage of the Evenlode Landscape Recovery Project, west of Oxford. Rebalance Earth is providing catalytic capital to unlock £50 million in private investment alongside public funding to pay farmers for "landscape recovery". This project aims to create "sponge landscapes" that reduce flood risk, delivering maintenance cost savings for major infrastructure operators like Network Rail and power utility SSE. * The LTAF Opportunity: Gardner suggests that the Long-Term Asset Fund (LTAF) structure is an ideal "sweetie shop" for defined contribution and local government pension scheme funds to access a balanced portfolio of sustainable forestry, regenerative agriculture, and ecosystem services. He also describes the path from the sweetie shop to a global megastore for natural capital. Embracing the Fosbury Flop The conversation concludes with the analogy of the ‘Fosbury Flop’, with Gardner suggesting that the investment industry needs a similar leap in logic to address climate change. By moving away from viewing nature as an "add-on" and instead integrating it into the core definition of infrastructure, he argues the UK can lead the world in nature restoration. With more pension assets in the UK than total GDP, the shift toward a 70% private-capital funding model for landscape recovery offers a clear path toward both national resilience and institutional alpha.

Risk, Return and Responsibility – Episode 8: The Asset Owner's Moonshot Challenge

Risk, Return and Responsibility—the monthly podcast from Sustainable Investor—provides institutional asset owners with the news and views shaping the sustainable investment landscape and our wider economic and social systems. In this episode, former UK pensions minister Guy Opperman and Sustainable Investor Editorial Director Chris Hall talk to Marisa Hall, Head of the Thinking Ahead Institute (TAI), about the role of asset owners in the evolving landscape of global capital. As a former actuary and now leader of a global not-for-profit investment network, she provides a unique window into how the world’s most influential asset owners are adapting to a "ruptured" global order. From the findings of the TAI’s latest Asset Owner 100 report to the "Moonshot Challenge" of systemic investing, this conversation delves into why traditional investment "buckets" are being broken down in favour of a more dynamic, holistic approach. Guests   ● Marisa Hall: Head of the Thinking Ahead Institute ● Guy Opperman: Former UK Pensions Minister and host ● Chris Hall: Editor-in-Chief of Sustainable Investor Interview highlights * The Power and Concentration of Global Capital: The TAI’s Asset Owner 100 report highlights that the top 100 asset owners control roughly US$30 trillion in capital, with the top 20 "megas" alone commanding 56% of those assets. These organisations are viewed as the "movers and shakers" of the industry, wielding the most influential capital on the planet to shape the future of the global economy. * The Shift to a Total Portfolio Approach (TPA): Leading asset owners are moving away from traditional strategic asset allocation and rigid asset class "buckets" toward a TPA model where every dollar must compete for capital. This approach serves as a gateway to better sustainability practices by allowing investors to be more dynamic and use real-time information to meet their long-term goals. * Navigating the Net Zero Plateau through 3D Investing: While 52% of the top 100 asset owners have set net zero targets, new commitments have plateaued. But the challenges to universal owners from interconnected and systemic risks are prompting a shift toward "systems-level investing". This includes a 3D Investing framework that helps asset owners look beyond risk and return to consider the real-world impact their investments have on the systems they rely upon for future returns. * The Impact of Consolidation and Strategic Partnerships: Consolidation in markets like Australia and the UK is enabling asset owners to build greater internal capability and develop "smart partnerships" with asset managers, based on a shared view of the role of investment capital in driving sustainable growth. This scale allows large funds to be patient, selective, and act as a "critical friend" to their asset managers, ensuring deep alignment with the best long-term interests of their members. * Geopolitics and AI as Systemic Determinants: Geopolitics has shifted from being a mere driver of returns to a determinant of how the entire investment system functions. Simultaneously, asset owners are building "intelligence ecosystems" to embed AI into their processes, aiming to generate "organisational alpha" by combining technology with human culture and decision-making. Embracing the Moonshot The conversation concludes with a forward-looking assessment of the "Moonshot Challenge"—the idea that investment organisations must understand and address interconnected and systemic risks at source to thrive in an increasingly complex world. Despite a "plateauing" in the announcement of explicit commitments, there is a growing sense of optimism that major asset owners are becoming smarter, more creative, and more resilient in how they integrate sustainability into their investment decisions. By focusing on stewardship, collaboration, and a reset of how we define risk, the leaders of today’s US$30 trillion capital pool are moving into a position to not just navigate the future, but to actively shape it for the generations to come.

Risk, Return and Responsibility – Episode 7: Beyond Cost—The New Value Frontier for UK Pensions

Risk, Return and Responsibility—the monthly podcast from Sustainable Investor—provides institutional asset owners with the news and views shaping the sustainable investment landscape and our wider economic and social systems. In this latest episode, former UK Pensions Minister Guy Opperman and Sustainable Investor Editorial Director Chris Hall are joined by Mike Ambery, Retirement Savings Director at Standard Life, part of the Phoenix Group. Together, they explore the seismic shifts facing the UK retirement market as it transitions from a legacy of cost-containment toward a future defined by value, scale, and sustainable outcomes. The discussion unpicks the upcoming Value for Money (VfM) framework and the Pension Schemes Bill, examining how performance metrics will reshape asset allocation and drive industry consolidation. From the ‘herding’ risks seen in Australia to the impact of the Mansion House Compact and shifting geopolitical attitudes toward ESG, the panel identifies the challenges of delivering ‘triple wins’ for government, consumers, and the planet. Guests: ● Mike Ambery: Retirement Savings Director at Standard Life (Phoenix Group) and a prominent pensions market commentator. ● Guy Opperman: Former UK Pensions Minister and host. ● Chris Hall: Editor-in-Chief of Sustainable Investor. Interview Highlights: ● Will the Value for Money (VfM) framework truly improve member outcomes? Ambery argues the core purpose of VfM is to improve individual outcomes by looking beyond just investment performance to include service quality. However, the industry must pivot from a cost-based system established in 2012 to one that prizes long-term value and sustainable investment strategies. ● Does the VfM framework conflict with sustainable investment goals? The panel expresses concern that a narrow focus on performance metrics could hinder sustainable investing if not properly implemented. Chris Hall notes that ‘forward-looking’ metrics must be independently assessed and paired with clearer guidance on fiduciary duty regarding systemic risks to ensure sustainability isn't sidelined by short-term data. To reach a ‘triple win’ by 2030, the panel suggests that VfM must be part of a broader package including industrial policy and stewardship. ● Does the Australian model risk creating a ‘herding’ mentality? While consolidation is necessary for scale, Opperman warns that benchmark-driven performance tests can lead to "groupthink" as providers scramble to avoid being in the bottom percentile. Ambery agrees that while "sunlight is the best disinfectant", transparency must be paired with measures that reward diverse, productive asset allocation rather than mere imitation. ● Why is scale critical for the future of sustainable investment? To effectively deploy capital into private markets and sustainable solutions, Ambery suggests firms need significant scale—pointing to Phoenix Group’s £300 billion capacity as an example of what is required to support dedicated research and impact teams. He identifies A$25 billion as a potential minimum threshold for organisations to operate effectively. ● How will global policy trends, including the "Trump impact" affect the City? Despite political rhetoric reclassifying ESG in the US, Ambery believes the UK’s commitment to these factors remains pivotal. Chris Hall notes that as the US takes a differing view, there is an opportunity for a "middle way" led by the UK, EU, and Canada to drive a secure energy transition. Thanks for joining us: If you like what you hear, you can subscribe to Sustainable Investor and this podcast on Apple Podcasts, Spotify, or your preferred platform.

The Five Issues Shaping Sustainable Investment in 2026

In 2025’s final episode of Risk, Return and Responsibility, the monthly podcast from Sustainable Investor, former UK Pensions Minister Guy Opperman and Editorial Director Chris Hall are joined for an end-of-year reckoning by Dr Anthony Kirby, ex-Head of Regulation and Risk for Asset Management and Capital Markets in Europe at EY.    Together, they review 2025’s big themes and give their views on the questions that will determine sustainable investment returns and impacts 2026:    Is the ESG backlash gathering speed or petering out? With Donald Trump returning to the White House, new hurdles hampered investor scrutiny, while the Inflation Reduction Act was dismantled alongside many a diversity, equity and inclusion initiative. Meanwhile Europe took a scythe to sustainable investment regulation, as finance sector net zero commitments withered. Asset owners dug in, further integrating sustainability into their investment processes and doubling down on oversight of material financial risks - but do they need to do a better job of explaining and delivering outcomes?    Is the divide between asset owners and managers bigger than the Atlantic? Already under huge political and legal pressure, US asset managers faced even greater difficulties in 2025 - with new rules from the Securities and Exchange Commission making it harder to engage with portfolio companies, just as European asset owners underlined their commitment to climate stewardship. The fallout has been measured in lost mandates, but could litigation and retrenchment be on their way in 2026? Effective stewardship of assets could depend on a closing of gaps in both investment horizons and business cultures.    Can private markets deliver both returns and impact at an attractive cost? Institutional investors are increasingly turning to alternative assets to achieve tangible sustainable outcomes as well as superior returns. In markets such as the UK, governments also expect asset owners to achieve the scale to leverage these channels to drive growth too. In response, managers must deliver clear evidence that sustainable business models are driving value creation at every stage of the investment process. Are their reporting cycles, stewardship capabilities, cost and fund structures up to the job?    Will supply meet demand for nature-positive investment opportunities? Nature became a critical stewardship priority for asset owners in 2025 against a backdrop of mixed policy outcomes across plastic pollution, deforestation, and ocean protection. COP30 helped to put nature-related investments on the agenda as asset owners looked beyond measuring and managing risk to seeking out opportunities for returns. Will we see dedicated nature funds or rather nature being fully embedded into a wider range of investment decisions, with impact investment solutions remaining niche for now?   Can the upsides of the AI boom survive the downsides of a bust? Hopes for transformative productivity gains from AI innovation have allowed markets to face down all headwinds in 2025. Even so, investors wonder when returns will justify capex and whether ESG risks will be addressed. Despite the rising valuations, careful analysis is needed to invest in AI, its infrastructure and supply chain - and to identify the sectors using the technology to deliver higher returns. 2026 could also see more asset owners and managers deploying AI to deliver new insights into sustainability-related risks and opportunities.