The coming year presents a critical test for creating sustainable value. In a world marked by fragmentation and division, our Institute remains steadfast in its mission: to advance knowledge, research and discovery that addresses global sustainability challenges. We believe capital markets can and must contribute to a better future for all.
In 2025, we will explore six pivotal questions shaping the sustainability landscape. We invite thought leaders in finance, academia and policymaking to join us in addressing these critical issues.
1. What is the private sector’s role in enabling climate adaptation and resilience?
Rising temperatures necessitate a pivot: We must withstand and recover from more floods, wildfires and other hazards. The critical question is who will pay for adaptation and resilience, and where the needs – and investment opportunities – will be.
Building on our research with the Global Adaptation and Resilience Investor (GARI) working group and supported by the Bezos Earth Fund, the Institute and our collaborators plan to examine different facets of these questions and the private sector’s role, from finding case studies of adaptation solutions to exploring varied investor profiles. Among our initiatives will be to explore the investability of adaptation and resilience in the Asia-Pacific region and the role of insurance in improving resilience.
2. How can we better measure societal impact alongside risk and return?
How sustainability factors impact financial performance remains the number one topic of interest from global investment institutions and a cornerstone of our Institute’s efforts to bridge theory and practice. In 2025, we will further promote nuance and rigor on this topic through enhancing our sustainability research portal and deepening our engagement with leading researchers.
Our focus will extend to exploring progress in measuring the societal costs and benefits of business activities. As impact-oriented measurements mature, their accessibility and adoption could augment traditional views of risk and return to drive more efficient allocation of capital for sustainable value.
3. How can investors address interlinked risks of nature, health and climate?
Time and again in our work we confront interconnected risks and opportunities. With COP30 in Brazil approaching, we aim to explore the role of private sector investors in advancing climate, nature, and health, including through carbon trading and innovative financing for ecosystems and a just transition. The continuation of international negotiations on plastics pollution prompts us to extend our work on global health risks to help investors understand the potential implications.
4. How do we communicate more clearly about sustainable value?
From green to transition finance, the terminology practitioners use to describe sustainability continues to evolve, shaped by market sentiment, client expectations and regulatory demands. Building on the reality check we initiated last year, our Institute seeks novel approaches to untangle perceptions—and misconceptions—about the performance and impact of climate, sustainability and sustainable investing. And we remain committed to facilitating education that broadens understanding of sustainable finance beyond practitioners.
5. How far can a finance-led climate transition take us?
The conundrum: More investors and companies disclose emissions and set ambitious reduction goals, but global emissions continue to grow. Curtailing the financing of high-intensity businesses has not (yet) precipitated real decarbonization. To some, this gap shows the limits of the financial sector in offsetting weak national climate policies; to others, it calls for adding new approaches to the traditional financial toolkit.
Our policy-meet-practice roundtables have provided an important forum for debate designed to make sense of the puzzle. In 2025, we will further foster this community to interrogate the (hidden) fallacies of our theories of change (what if neither engagement nor divestment work?) as well as promising avenues such as the growing role of private-market investments and carbon markets in catalyzing the shift to a low-carbon economy.
6. How can investors better address localization of risks and opportunities?
The clean-energy transition is unfolding at different speeds in different regions, while the impacts of a warming planet are overwhelmingly local. Measuring market expectations for how fragmented risks and opportunities unfold and leveraging a community of experts to help practitioners apply climate scenariosill be among our critical areas of focus. (Join us on January 29 for a webinar to explore market-aligned climate scenarios. Register here.)
We also are building a knowledge base to localize data and models, including through our Climate Scholars Program, which will inaugurate a research cohort in Singapore, drawing on MSCI geospatial data to develop APAC-specific models, and through our roundtables targeting region-specific challenges.
We are committed to advancing independent research on topics beyond those we’re exploring by offering data that builds the collective knowledge base and technical capacity across the ecosystem. Our Climate Data Knowledge Program, for example, has made investor-grade data and metrics from MSCI ESG Research freely available to academic researchers.
Whether you’re a researcher, policymaker or finance practitioner, we’re eager to hear from you. See how to work with us, get in touch here, and sign up for our latest news and insights in your inbox.
Thank you to our colleagues, collaborators and advisors for joining us on this journey. Here’s to a year of opportunities.