Why collaborating is key to climate change

Pendal

January 2026

5 minutes read time

WHAT does it take to tackle climate change, food security, or pandemic risk? At the recent PRI Stewardship and Collaboration Forum, the answer was clear: collective action.

The United Nations Principles for Responsible Investment (UNPRI) brought together global leaders in sustainable finance.

This Sydney forum, hosted by Regnan, convened 45 asset owners, managers, and responsible investment professionals to share insights on collaborative stewardship. Regnan's Grace Zhang presented at a similar event in Melbourne.

The power of collective action

Investors face challenges that are global and demand collective action. Issues such as climate change are beyond the control of one individual company or investor.

Investors who view their activities within the context of interconnected, dynamic systems recognise their role in building resilience across the financial ecosystem.

This systems-thinking approach has long been central to Regnan's research, engagement, and advocacy.

It is why Regnan is actively involved in industry associations and initiatives within the responsible investment industry.

Why impact investing?

Aligning investments with personal values to have a positive impact on the world while also generating a financial return.

Why collaboration matters

Collaboration gives investors access to diverse perspectives, shared intelligence and optimises resources. It also offers greater scale.

Regnan has long recognised the importance of bringing voices together to address big challenges. Since Regnan became part of the Perpetual Group, stewardship opportunities have been amplified.

This represents greater funds under management (FUM), which has increased influence. Collaboration also enables different engagements across geographies, asset classes and fund types.

We have found within the Perpetual Group that collaboration allows for diversity of thought through challenging assumptions and improving decision quality.

Regnan research highlights that to achieve true diversity is not just by having varied backgrounds, but by also cultivating a culture where differences can be valued and expressed.

Regnan also seeks to bring voices together across our industry. This has included hosting like with the PRI event earlier this month, as well as facilitating and bringing communities together.

A few years ago, Regnan brought together different links along the food production supply chain to discuss sustainable agriculture.

Last month, we walked around the Regnan eucalyptus trees we get our name from with key leaders in the biodiversity space for an exploration of the work Regnan is doing in advocating the Great Forest National Park.

Regnan is also a supporter of the other initiatives by the UNPRI, working with the SPRING initiative which relates to nature, co-leads the Collaborative Sovereign Engagement on Climate, and has a longstanding membership with the Climate Action 100+ initiative.

Challenges and realities

Positive intentions alone do not guarantee smooth collaboration. As anyone who participated in group projects at university knows, not all contributions are equal.

Internal alignment with specific funds, mandates, and client expectations are essential.

Collaboration must connect with other stewardship and engagement efforts to avoid "collaborative fatigue" - multiple meetings with nebulous outcomes that fail to advance the purpose of the funds.

Why now?

Continued ramp up in focus on climate change and ways to achieve global net zero goals through the transition to clean energy is generating greater opportunities and diversification in impact investing.

Navigating regulation

Regulatory challenges are increasingly shaping the landscape of responsible investment. In the US, political resistance has led to changes in shareholder rights, antitrust claims, and investigations into proxy advisors.

Closer to home, the ACCC has opened consultations to introduce a class exemption for certain types of beneficial collaboration.

It is vital that joint stewardship activities, such as engagement on climate, human rights, and governance, remain permissible under competition law.

Restricting such collaboration could undermine efforts to address systemic ESG risks that require collective action.

Looking forward

Collaboration does not negate competitive tension. Our clients expect us to undertake stewardship activities that provide meaningful investment insights and strengthen portfolio holdings.

Nevertheless, collaborative stewardship is essential for managing systemic risk.

Regnan has been a pioneer in using a systems-thinking approach to sustainable investing, and involvement in these collective initiatives is vital to support the health and resilience of the entire system (which, incidentally, includes our investable universe).

The stewardship work Regnan does for Regnan funds, and the support provided across the Perpetual boutiques, treats stewardship as a beneficial component to active management.

Leadership in collaboration activities allows us to leverage our research and experience, ultimately making us better stewards of the portfolios we influence.

Why Regnan Credit Impact Trust?

Provides easy access to an institutional-grade impact investment fund that is highly liquid, diversified and scalable.

Funds operated by this manager:

Pendal MicroCap Opportunities Fund , Pendal Global Select Fund - Class R , Pendal Sustainable Australian Fixed Interest Fund - Class R , Pendal Focus Australian Share Fund , Pendal Horizon Sustainable Australian Share Fund , Regnan Credit Impact Trust Fund , Pendal Sustainable Australian Share Fund , Pendal Sustainable Balanced Fund - Class R , Pendal Multi-Asset Target Return Fund

 This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current as at December 8, 2021. PFSL is the responsible entity and issuer of units in the Pendal Multi-Asset Target Return Fund (Fund) ARSN: 623 987 968. A product disclosure statement (PDS) is available for the Fund and can be obtained by calling 1300 346 821 or visiting www.pendalgroup.com. The Target Market Determination (TMD) for the Fund is available at www.pendalgroup.com/ddo. You should obtain and consider the PDS and the TMD before deciding whether to acquire, continue to hold or dispose of units in the Fund. An investment in the Fund or any of the funds referred to in this web page is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. This information is for general purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient's personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation. The information may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information is complete and correct, to the maximum extent permitted by law neither PFSL nor any company in the Pendal group accepts any responsibility or liability for the accuracy or completeness of this information. Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Performance data (post-fee) assumes reinvestment of distributions and is calculated using exit prices, net of management costs. Performance data (pre-fee) is calculated by adding back management costs to the post-fee performance. Past performance is not a reliable indicator of future performance. Any projections are predictive only and should not be relied upon when making an investment decision or recommendation. Whilst we have used every effort to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not take into account known or unknown risks and uncertainties. The actual results may differ materially from these projections. For more information, please call Customer Relations on 1300 346 821 8am to 6pm (Sydney time) or visit our website www.pendalgroup.com

10k Words

Equitable Investors

 January 2026

(2-minute read)

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We kick off calendar 2026 by trying our hand at our own sentiment indicators - combining valuation and implied volatility for the US equity and bond markets, the Aus equity market and ASX small caps. Are investors paying a premium price for market calmness? Then we check in on Morningstar's bottom-up valuations. There is a chasm between small and large cap valuations based on revenue multiples but not so much on earnings. Tech has done the heavy lifting in large cap valuation AND earnings in the US over the past decade and the trend is expected to continue - but can US smalls deliver on lofty targets and drive a catch-up? In US dollars, the US market has underperformed most major markets in the Americas. Then we look at how short-term (daily) volatility itself is becoming more volatile over time. Turning to the economy, we look at personal loan delinquencies and savings rates, with signs of deterioration in consumer behaviour.

A custom US equity market sentiment score - based on CAPE adjusted equity risk premium and the VIX relative to their historical average and volatility

Source: Equitable Investors

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A custom ASX equity market sentiment score - based on the dividend yield spread on bonds and the ASX VIX relative to their historical average and volatility

Source: Equitable Investors

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A custom ASX small cap sentiment score - based on the dividend yield spread on bonds and realised volatilty relative to their historical average and volatility

 

Source: Equitable Investors

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A custom US debt market sentiment score - based on 10 year bond yield and MOVE Index of implied volatility relative to their historical average and volatility

Source: Equitable Investors

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Market price relative to US market bottom-up valuations from Morningstar

Source: Morningstar

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Market price relative to ASX market bottom-up valuations from Morningstar

Source: Morningstar

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Earnings: US Tech vs the Rest

Source: Topdown Charts

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Actual reported and bottom-up consensus EPS growth estimates

Source: Goldman Sachs Global Investment Research

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Enterprise Value / consensus sales - S&P 500 (IVV ETF) v US microcaps (IWM ETF)

Source: Koyfin

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Enterprise Value / consenus EBITDA - S&P 500 (IVV ETF) v US microcaps (IWM ETF)

Source: Koyfin

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Price / consenus EPS - S&P 500 (IVV ETF) v US microcaps (IWM ETF)

Source: Koyfin

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Country ETF performance over past 12 months (in USD)

Source: Koyfin

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No. of daily 10% swings per calendar year in the VIX (CBOE Market Volatility)

Source: Iress, Equitable Investors

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No. of daily 10% swings per calendar year in the S&P/ASX VIX

Source: Iress, Equitable Investors

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Personal Loans - 90+ Delinquency (#)

Source: Equifax

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Australian savings ratio

Source: RBA

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USA personal saving

Source: St Louis Fed

Funds operated by this manager:

Equitable Investors Dragonfly Fund

Disclaimer

Past performance is not a reliable indicator of future performance. Fund returns are quoted net of all fees, expenses and accrued performance fees. Delivery of this report to a recipient should not be relied on as a representation that there has been no change since the preparation date in the affairs or financial condition of the Fund or the Trustee; or that the information contained in this report remains accurate or complete at any time after the preparation date. Equitable Investors Pty Ltd (EI) does not guarantee or make any representation or warranty as to the accuracy or completeness of the information in this report. To the extent permitted by law, EI disclaims all liability that may otherwise arise due to any information in this report being inaccurate or information being omitted. This report does not take into account the particular investment objectives, financial situation and needs of potential investors. Before making a decision to invest in the Fund the recipient should obtain professional advice. This report does not purport to contain all the information that the recipient may require to evaluate a possible investment in the Fund. The recipient should conduct their own independent analysis of the Fund and refer to the current Information Memorandum, which is available from EI.

Hedge Clippings | 16 January 2026

Looking forward, Looking back, Welcome back!

In 2025, there were a number of major themes that dominated markets and the news, and which in turn influenced returns of the various peer groups and the managed funds operating within them.

Equity-based funds continued to benefit from the tailwinds of strong global equity markets, which saw the S&P 500 (T/R) deliver just shy of 18%, while the ASX 200 lagged that at 10.32%. The 542 equity-based funds in AFM's database averaged a return of 13.2%, with 55% of them outperforming the ASX 200.

However, averages can be misleading! Fund selection remained (as ever) critical to success, with individual fund results ranging from -20% through to an impressive return of 294%.

The question for investors and fund managers alike is whether the dominant themes of 2025 will continue into 2026? There's no reason to think they won't, and there's no reason that just rolling over from December 2025 into January 2026 will mysteriously change last year's trends.

Global Technology and AI:

The tech juggernaut, and particularly the focus on AI, rolled on - or did it? The bottom line is that the "Magnificent 7" became a "Dominant Duo" consisting of Alphabet and Nvidia.

The so called Magnificent 7 averaged a return for the year of 27.5% outperforming the S&P 500 by a clear 10%, but that hid that fact that Alphabet (Google) and Nvidia were up 65%, and 40% respectively, while Microsoft (15%), Meta (13%), Apple (8%), and Amazon (6%) all underperformed the S&P 500.

Elon Musk's Tesla, the last of the Mag 7, rose about 15% to be broadly in line with the market, having scored a few own goals, and distractions during the year.

Artificial Intelligence dominated markets. It seems unlikely the focus and adoption of AI will wane - if anything, it is likely to continue to expand and dominate, but with question marks around stretched valuations, energy, and at a stock level, which horse to back there are likely to be both winners and losers.

Gold, Precious metals, and Resources:

In 2025 gold rose 65%, silver was up almost 150%, platinum 127%, while copper rose over 40%. Critical minerals and rare earths became both valuable and a geopolitical point of leverage.

Not surprisingly, funds investing in resources, in part or exclusively, dominated the top-performing tables in 2025, with the Top five returning between 102% and 294% in 2025.

As can be seen, resources are cyclical. Will the drivers of the precious metals boom continue? As always, there are those saying "this time it is different,"  although the queues of retail punters lining up in Martin Place each morning outside the bullion dealer suggest a toppy market.

Geopolitics and the Trump Factor:

The Trump Factor is one theme we're confident will remain in 2026. In the first two weeks of the year, Trump is dominating the headlines as only he can, including threatening the regime in Iran, kidnapping the President of Venezuela, eyeing off Greenland, and, closer to home, continuing to bully Jerome Powell (or trying to) into lowering interest rates. The problem for investors is that it is difficult to predict his unpredictability!

If he persists with his intention to absorb Greenland, it is likely to end the NATO agreement - but maybe that's his ulterior motive?

News | Insights

Investment Perspectives: Thinking about A-REITS | Quay Global Investors

Affordability is a hot button issue for 2026 | Magellan Asset Management

December 2025 Performance News

Bennelong Australian Equities Fund

4D Global Infrastructure Fund (Unhedged)

DS Capital Growth Fund

Bennelong Concentrated Australian Equities Fund

Glenmore Australian Equities Fund

Bennelong Emerging Companies Fund

Airlie Australian Share Fund

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