Sustainability Snippets June 2025

  • Responsible Investing Resilient

  • Food Security Threatened

  • UK Executive Pay Trends

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Article Type
The Wider Lens
Topic
Responsible Investing
Published
June 13, 2025
Read time
5 mins
Author
Aegon AM Responsible Investment Specialists
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Let your voices be heard! 

The FCA published their Financial Lives Survey this month, an interesting report based on responses from nearly 18,000 people about their financial situations and preferences, covering topics from cash savings to insurance, mortgages and fraud.

 

For the purposes of this publication, we focused on the Responsible Investment part, which showed some interesting results: 

 

One-third strongly agree and another third slightly agree with the statement “I would like the way my money is invested to do some good as well as provide me with a financial return.” 

 

This clearly indicates that the death of ESG is an exaggeration. Additionally, it’s encouraging for our product range to note that of those invested in Responsible Investment products, 29% are in exclusionary-based funds, 28% in funds seeking “companies doing good” and 23% in sustainable funds.  

 

And finally, more than 75% believe they should be asked if they wish to invest in an RI product when receiving pension or investment advice. This shows a willingness to engage, not just opt out of  of the choices laid out before them. You can view the report here.

 

Rising temperatures toast wheat yields 

A recent study published in the renowned Proceedings of the National Academy of Sciences reveals that global wheat yields are approximately 10% lower due to climate change. The climate implications from the past 50 years have found that increasingly hot and dry conditions have negatively impacted yields of three key crops: wheat, barley, and maize. Specifically, yields were reduced by 12-14% for barley, 8-12% for wheat, and 4% for maize. 

 

Though technological advancements and better seeds have increased grain yields by 69-123% for staple crops, it is not enough to negate the effects of climate change, which will threaten food security and prices. The study emphasises that vapour pressure deficit, which is the difference between the moisture content in the air and the maximum moisture the air can hold at a given temperature, plays a crucial role in plant transpiration and growth, and has become more prevalent, negatively impacting crop yields. 

 

This issue is particularly relevant given the recent lack of rain in Europe. It is alarming since maize and wheat comprise about 20% and 15% of global caloric intake respectively, while barley, of which around 70% of the total crop is used for animal feed, constitutes approximately 15% of livestock calories. 

 

The only way is up? 

The UK voting season is all but over. Having shown relative restraint in recent years, history will show that 2025 was the beginning of a step change in the quantum of UK executive remuneration. Following the London Stock Exchange’s calling for pay to be more aligned with US peers (to help quash the exodus of UK companies delisting) and the Investment Association’s review of the remuneration guidelines -  companies have been quick to jump on the band wagon and seek approval for large increases in variable pay, especially amongst those considered to be truly global companies.  

 

Rationale has been standardised, emphasising the need to retain key executives and establish a structure to attract new talent if necessary, as the most common reasons for change. Evidence shows that whilst retention is a key risk, examples of executives jumping over the pond are few and far between.  

 

Whilst certain sectors are more susceptible to US approaches (software and technology companies), there is no doubt that this increased quantum will trickle further down the FTSE and further fuel the general public’s angst towards executives and shareholders who approve their packages. 

 

Charging ahead? 2025 Global EV outlook 

According to the International Energy Agency’s (IEA) latest Global Electric Vehicle (EV) Outlook report, more than 1 in 5 cars sold globally in 2024 were electric.  The total number of electric cars sold in 2024, surpassed 17 million, an increase of 3.5m relative to 2023.  To put that growth into context, the year on year increase alone was more than all electric cars sold globally in 2020. 


Whilst sales growth slowed in Europe and the US, China led the charge with close to 50% of sales coming from electric vehicles.  In many cases, buying an EV in China is cheaper than buying an equivalent Internal Combustion Engine (ICE) model, a parity that other regions have yet to meet at scale. Growth was also significant in Emerging markets, particularly in Asia and Latin America, driven by policy support and more affordable Chinese imports.  It is worth noting that China produced over 70% of the world’s EVs in 2024 and its production domination is expected to continue.   


So Watt’s next and are EVs charging ahead…? The IEA report also projects continued strong growth of EVs going forward.  Again, this is expected to be driven by China and Europe; by 2030 the IEA expected 80% of new car sales in China to come from EVs and 60% in Europe.  Though the current political and policy environment towards EVs in the US is less favourable, continued growth is still expected albeit at a slower rate.   
 

 

 

 

 

 

Disclosures

Author

Aegon AM Responsible Investment Specialists
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