Why Investors Expect Businesses to Build Internal Capability

The UK and EU investment community is sending a clear message: sustainability is no longer a side project, it’s a business imperative. While recent political backlash has led some asset managers to tone down their ESG messaging, long-term investor expectations are rising. The focus has shifted from bold claims to measurable progress, from surface-level branding to operational resilience.

Institutional investors such as Aviva Investors and Legal & General have made it plain: companies must move beyond reporting and show real sustainability performance. From climate action to social impact, investors are demanding clear transition plans, accountability, and the internal capacity to deliver.

In 2023, Aviva wrote to over 1,600 companies warning they will vote against boards that fail to meet sustainability targets. Legal & General’s Climate Impact Pledge publicly names and sanctions underperforming companies, and even BlackRock, despite stepping back from the term “ESG”, continues to push for science-based targets across its portfolio.

This shift is reinforced by regulation. The UK’s new Sustainability Disclosure Requirements and the EU’s SFDR and CSRD frameworks are raising the bar on transparency, aiming to stamp out greenwashing and drive genuine corporate change. As a result, the investment community is pivoting from broad ESG labels to focus on real-world outcomes, what’s being achieved, not just claimed.

At Edify Collective, we’re helping companies meet these expectations. Our AI-powered micro-learning platform enables organisations to embed sustainability and essential skills across every function, from procurement to leadership. We believe that capability is the missing link. Without it, companies risk falling short of investor and regulatory demands.

Investors are no longer impressed by glossy reports. They want evidence that sustainability is built into how a company operates, makes decisions, and trains its people. This is not just about reputational risk; it’s about capital allocation. Businesses with the internal ability to manage environmental and social challenges are seen as more resilient, more future-ready, and ultimately, more investable.

As sustainable finance becomes more sophisticated, so too must companies. Impact is not the new bottom line; it’s the new baseline. And those who invest in building internal capability today will be the ones who lead tomorrow.

Now is the time to act, not because it looks good, but because it matters. And because the market is watching.