Your weekly guide to Sustainable Investment

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“The European view on defence and the need for defence has shifted,” Matt Christensen, global head of sustainable and impact investing, said in an interview.

Allianz Global Investors expects some of its ESG funds to start adding defence holdings in the coming months, as the money manager updates prospectuses to match the political mood in Europe.

“The European view on defence and the need for defence has shifted,” Matt Christensen, global head of sustainable and impact investing, said in an interview in which he alluded to both the war in Ukraine and the need to meet NATO goals.

AllianzGI is now in the process of lifting internal restrictions on defence assets for most so-called Article 8 funds, which are supposed to promote environmental, social and governance goals. Clients were notified of the planned change at the end of March.

It’s part of a wider movement that’s reshaping ESG investing across Europe, with Deutsche Bank’s investment unit, DWS Group, among firms taking similar steps.

The chief executive of Euronext, Stephane Boujnah, has gone so far as to suggest the time has come for a rebranding of ESG to focus on energy, security and geostrategy.

Regulators have made clear their main concern is transparency. BaFin’s chief executive director of strategy, policy and control, Rupert Schaefer, said in May that Germany’s financial watchdog “strongly” recommends that asset managers “don’t disappoint their clients with insufficient clarity” if they decide to add defence holdings to funds.

The pivot in strategy at AllianzGI not only allows its fund managers to buy assets tied to military equipment and services, but also to consider investments in nuclear weapons-related activities under the Non-Proliferation Treaty, according to the note it sent clients in March.

Christensen says that once prospectuses have been updated, it will be up to individual portfolio managers to decide “what might be appropriate” to put in ESG funds, and that will depend on “the specific strategy they have”.

The goal is to cater to clients “who would like to see a good approach to ESG risk management, but who don’t necessarily want to exclude everything”, Christensen said.

The new defence-related activities now eligible for investment account for 1.7% of the MSCI All Country World Index.

“Importantly, the changes to our exclusions policy are not based on short-term tactical views,” he said. “Rather it is a fundamental and long-term decision.”

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New research from the World Resources Institute finds that each $1 investment in climate adaptation can yield more than $10.50 in returns over 10 years, reflecting not only the avoided losses from climate impacts but also a wide range of economic, social and environmental benefits that are generated even when disasters don’t occur.

In a new paper, Strengthening the Investment Case for Climate Adaptation, WRI analyzed investments in 320 adaptation and resilience projects spanning agriculture, water, health and infrastructure. These ranged from upgrading food storage facilities in Bangladesh to improving water management in Brazil.

The investments represented over $133 billion in value and are expected to generate $1.4 trillion in benefits over 10 years. Individual investments were estimated to generate an impressive average return of 27%, WRI found.

“Extreme weather events like floods and droughts are becoming more frequent and intense around the globe, disrupting communities and the infrastructure they rely on. In 2024 alone, the world endured 58 disasters that wreaked over a billion dollars in damages each,” Carter Brandon, Bradley Kratzer, Aarushi Aggarwal, Harald Heubaum and Celine Novenario wrote in a post on the WRI website reporting the research findings.

“Yet finance to cope with and respond to these impacts falls persistently short: The gap between funding needed to adapt to climate change and what is currently available is as high as $359 billion per year,” they said.

They explained that part of the reason for the disconnect is that adaptation measures, such as strengthening early warning systems or making infrastructure more resilient, are seen in traditional financing only as a way to avoid potential losses and not as a broader investment opportunity.

But using a “triple dividend of resilience” framework, researchers showed that climate adaptation investments can generate higher rates of return than is commonly thought. They provided this example:

“Consider an urban infrastructure project in Vietnam that aims to reduce flooding and improve water drainage. When estimating the return on this project, many models would consider only the avoided cost of flood damage. But investments in resilient infrastructure could also increase average land prices, decrease health care costs by reducing waterborne diseases and boost workers’ productivity by reducing travel time, thanks to new and improved roads. The triple dividend framework would account for all these outcomes, offering a more complete picture of the value that adaptation and resilience projects can bring.”

Among other highlights from the research:

• Health: Adaptation investments in the health sector offer some of the highest returns, averaging over 78%. This is because investing in more resilient health systems can save lives, improve public health and bolster economic productivity, especially among vulnerable populations.
• Disaster risk management: Investments in disaster risk management also deliver high returns — nearly 36% on average — by safeguarding lives and infrastructure while minimizing economic disruption. This is particularly true of cost-effective tools like early warning systems.
• Sustainable agriculture and forestry: Adaptation returns in the agriculture and forestry sector average over 29%, largely driven by developmental gains like higher yields and productivity, as well as environmental benefits.
• Resilient infrastructure: Projects focused on resilient energy, cities and transport systems offer wide-ranging benefits, with an average return on investment of close to 30%.
• Water: Water-related projects saw 19% returns on average, although that number does not fully capture the range of benefits from investing in the water sector, which are often difficult to measure and quantify, researchers said.

“Looking at the full picture puts adaptation in a new light. Our research challenges the mindset that adaptation is a financial burden, pulling limited funds from other priorities. It proves that it is often much more profitable to adapt than not to do so — and that good adaptation is, in fact, good development,” the authors concluded.

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By midday in Mathare, a densely populated informal settlement in Nairobi, Kenya, the sun beats down on the tight rows of wooden stalls and corrugated metal rooftops. At an elevation of 5,889 feet (1,795 meters), Nairobi has long been known for its temperate climate. But in recent years, heat has become an unavoidable issue — especially in informal settlements, which can be up to 5 degrees C (9 degrees F) hotter than the rest of the city.

In Mathare, local street vendors selling fresh produce and fish once relied on a steady stream of customers throughout the day. Now, the heat often spoils their goods before they can be sold.

“If they don’t have a quick market, they’re seeing a lot of losses by the end of the day,” said Michelle Koyaro, program associate at Slum Dwellers International (SDI) Kenya. Some vendors have started selling in the cooler evenings, but fewer customers come out during those hours. Instead, after long days under the hot sun, sellers head home with headaches and lean earnings.

In cities around the world, extreme heat is no longer a short-term event or seasonal disruption. It’s a growing daily pressure that is reshaping how people live, move and work — and it’s getting worse.

Heat is a well-documented threat to health. According to the World Health Organization, nearly 500,000 people die from heat-related causes each year — a number expected to rise by 50% by 2050. But the crisis goes beyond public health: Heat is also undermining economies, infrastructure, social systems and the well-being of residents in cities around the world.

As temperatures rise, cities are confronting a complex, urgent and interconnected challenge. Heat is not an isolated issue. To adapt effectively, cities must understand how rising temperatures are transforming and threatening multiple aspects of urban life — and recognize they’re not alone in the challenges they face.

Already, more than 350 cities worldwide are grappling with summertime temperatures above 35 degrees C (95 degrees F), and that number will only grow as the climate warms. Cities have enormous potential to learn from one another — what has worked, and what hasn’t — as they adapt to heat and work to mitigate its worst impacts.

Here, through the lens of four essential sectors — health, transportation, jobs and economic productivity — we examine the cascading impacts of heat in cities and offer tangible, scalable solutions that cities can use to develop effective, far-reaching strategies.

Health: Prioritizing Well-Being as Cities Heat Up

Anyone who’s spent time outside on an extremely hot day knows how draining it can be — headaches, dehydration, fatigue and trouble concentrating. But what happens when this exposure is constant — not just for a few hours, but every day? The effects on the body can shift from uncomfortable to dangerous.

Prolonged heat exposure can strain vital organs like the heart and kidneys, disrupt sleep, cause mental stress and worsen chronic conditions such as asthma and cardiovascular disease. Researchers project that long-term heat exposure will become the norm, with parts of Africa, South Asia and Latin America among the most affected.

Extreme heat poses a particular challenge to low-income urban residents, who may live in poorly ventilated homes or work outdoors. Over the course of a day, prolonged heat exposure compounds the risks they face. Children, pregnant people and older adults are especially vulnerable.

Addressing these risks requires a multifaceted approach that works in both the short and long term. In the immediate term, cities need to invest in interventions that lower exposure in the places where people spend time or provide options for escaping the heat. Early warning systems, like those in Athens and Buenos Aires, alert residents to upcoming heat waves and offer practical guidance for staying safe.

Public cooling centers — community spaces with air conditioning or fans and drinking water — can reduce immediate health threats by providing temporary refuge. In Jodhpur, India, which is coping with intensifying heat waves, a net-zero cooling shelter equipped with misting fans, solar panels and a wind tower that passively circulates cooler air provides relief to those who must be outside. Inside, temperatures are up to 12 degrees C (21.6 degrees F) cooler than just outside the door.

In Phoenix, Arizona — the hottest city in the United States — a 24/7 cooling center drew thousands of visitors during 2024’s hottest period, including unhoused residents, who are far more likely to die from heat-related causes. This site, along with the city’s other heat preparedness efforts — such as connecting people to resources for air conditioning repairs — contributed to a 20% drop in heat-related emergency calls. Even brief breaks in cool spaces have been shown to reduce physiological and cardiovascular strain.

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Cutting the horns off rhinos causes a large reduction in poaching, according to a new study, which raises questions about the effectiveness of expensive anti-poaching techniques used to protect the African mammals.

Poaching for horn is a significant threat to the world’s five rhino species. The substance, which is similar to human fingernails, is commonly used for traditional medicine in China, Vietnam and other Asian countries. Dealers in the hidden market will pay tens of thousands of dollars for the horns, which are falsely believed to be effective at treating fevers, pain and a low sex drive in traditional medicine.

But new research in the journal Science has highlighted ways to better protect the animals from illegal hunters. An assessment of rhino protection methods in the Greater Kruger region of South Africa – home to a quarter of the continent’s rhinos – found that removing horns reduced poaching by nearly 80% between 2017 and 2023.

In a collaboration between scientists, conservationists and government officials, the research found no statistical evidence that traditional anti-poaching interventions – such as rangers, detection cameras, dog tracking and helicopters – caused significant reductions in rhino poaching, despite their multimillion-dollar cost, even though they were successful at detecting hundreds of poachers.

“Dehorning rhinos to reduce incentives for poaching was found to achieve a 78% reduction in poaching using just 1.2% of the overall rhino protection budget,” said Dr Tim Kuiper of Nelson Mandela University, a lead author of the study. “We might need to rethink our goals. Do we just want to arrest poachers? It doesn’t appear to be making a massive difference to reducing rhino poaching.”

To dehorn a rhino, workers sedate the animal, apply a blindfold and earplugs, and cut off the horn with a power saw. The horn will gradually regrow – an average rhino needs to be dehorned every 1.5 to two years. The process poses a very low risk to the animal and does not hurt it.

“The headline result is that dehorning stood out for its effectiveness. We are cautious to say that the other interventions are not working. They worked when measured by whether they were detecting poachers. But detecting and arresting a load of poachers doesn’t necessarily bend the curve on rhino poaching,” Kuiper said.

In South Africa, rhino poaching remains high, with 103 killed in the first three months of 2025. Last year, 420 were lost. In recent decades, rhino populations have collapsed in Asia and Africa due to poaching and habitat loss, continuing falls driven by European colonial hunters.

But the researchers behind the project, representing the University of Cape Town, Nelson Mandela University, University of Stellenbosch and the University of Oxford and other conservation institutions, cautioned that dehorning rhinos was not a magic bullet. A significant stump of horn mass remains on the rhino after dehorning, and some poachers were still prepared to kill rhinos for this section.

Sharon Haussmann, a pioneer in rhino conservation in South Africa and co-author on the paper, played a leading role in coordinating conservation efforts in the study area. She died unexpectedly at the weekend and Kuiper wanted to highlight the collaboration between different sectors that are often mistrustful of each other in her memory.

“Is a rhino still a rhino without its horn? That’s a bigger question,” said Kuiper.

One study of black rhinos indicated that while poaching rates decreased, dehorned animals became more timid and covered much smaller ranges. Researchers believe that horn is used to establish territories and dehorned rhinos were unable to do this after the procedure.

“We wouldn’t like to keep dehorning them for the next 100 years,” Kuiper said. “Ideally we would like to address the drivers of poaching. But it is better than the impacts of poaching”

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“Trump’s fossil fuel orders are a death sentence for my generation."

 

Twenty-two young people are suing President Donald Trump, arguing that his executive orders to “unleash” fossil fuel development and achieve “energy dominance” are not only unconstitutional but life-threatening — a direct challenge to his rollback of efforts to address the climate crisis. 

Many of the young plaintiffs have taken part in similar lawsuits before, and won. Now, they’re using the lessons learned in previous fights to improve their odds of success.

“Trump’s fossil fuel orders are a death sentence for my generation,” Eva Lighthiser, the named plaintiff in the case, said in a statement. “I’m not suing because I want to — I’m suing because I have to. My health, my future, and my right to speak the truth are all on the line. He’s waging war on us with fossil fuels as his weapon, and we’re fighting back with the Constitution.”

Lighthiser v. Trump, filed May 29 in federal district court in Butte, Montana, names Trump; several Cabinet secretaries and agencies, including the Energy and Transportation departments; and the EPA as defendants. 
 

At issue are two orders Trump signed on his first day in office: one, declaring “a national energy emergency” and a second boosting production of “American energy”. A third order, signed in April, aimed to reinvigorate “America’s beautiful, clean coal industry.” Together, the youth plaintiffs — who are between 7 and 25 years old — argue these actions prioritize fossil fuels, suppress climate science, and undermine federal laws designed to protect public health, promote environmental safety, and maintain scientific integrity. They also argue that the orders “amount to a wholesale attack on clean renewable energy and climate science — escalating the climate emergency” and violating their Fifth Amendment right to life and liberty.
 

“These are the three executive orders that are the basis for the administration’s efforts to both unleash new fossil fuels and block the build-out of renewable energy,” said Nate Bellinger, one of the attorneys representing the plaintiffs. “They’re often referencing these executive orders when they’re doing things like expedited environmental reviews for oil and gas development or expanding coal mines.”

Lighthiser v. Trump enumerates the many ways Trump’s orders adversely impact the plaintiff’s lives. The young people, described as “students, ranchers, scientists-in-training, artists, and educators,” claim their economic and academic opportunities have been jeopardized by the Trump administration’s aggressive campaign to wipe climate data from the internet. They’ve endured heat waves that kept them indoors and fled wildfires or floods that threatened their homes. Some have been hospitalized for lung problems, and five of them live with respiratory ailments exacerbated by pollution.

“Future generations should not have to foot the bill of the [left’s] radical climate agenda,” said White House assistant press secretary Taylor Rogers in response to the lawsuit. “The American people are more concerned with the future generations’ economic and national security.” Representatives for the federal agencies being sued did not respond to requests for comment. 

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