This year Environmental, Social and Governance (“ESG”) and climate investing came into the white-hot glare of the political spotlight. However, the “Anti-ESG” movement, a politically motivated pushback against “woke capitalism,” was not an attack on asset managers doing too little, but on those doing too much.
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Insurance, Catastrophe Risk and Climate
Redwood Grove Capital’s Q3 letter examines how a warming climate is widening the tails of the risk distribution, making once-improbable extreme weather increasingly common. That shift challenges an insurance industry built on pricing the past and makes forward-looking catastrophe modeling essential to understanding risk.
2026 Climate Impact Report
Builds on last year’s finding of a market-wide retreat from Net Zero commitments, showing RGC’s portfolio held its ground even as voluntary reporting slipped. Only 3% of the portfolio is Not Aligned with net zero goals — the lowest of any benchmark tracked — while 48% is Aligned or Aligning (62% once non-reporting clean tech holdings are included), and the portfolio remains the most carbon-efficient among its peers at 65 tons of CO₂ per $1 million of sales versus 105 for the Russell 1000 Value. Also asks whether AI is becoming the next high-emissions sector, as data center growth is now outpacing Big Tech’s own decarbonization targets.
Fires, Air Quality and Climate
Redwood Grove Capital’s Q2 letter examines how a warming climate is lengthening wildfire seasons and worsening air quality from the American West to New York and Europe. These disruptions illustrate a broader theme: climate adaptation—not just mitigation—is becoming a durable, multi-year investment opportunity.
