What Advisors Need to Know About the Net Zero Transition: Practical Insights from the Fund Managers Panel

Here are the key takeaways for advisors who want to guide clients through the transition with confidence and clarity.

There’s No Single Definition of a “Successful Transition,” and That’s Okay

One of the first questions raised in the panel was simple but important:

“What does a successful transition actually look like?”

The panel’s consensus: there isn’t a single universal answer.

Why? Because:

• Different sectors face different transition challenges 
• Data quality and standards are still evolving.
• Clients care about climate for different reasons: risk mitigation, values, opportunity, or regulation.
• The political landscape is shifting rapidly.

Instead of chasing a perfect definition, advisors can anchor their guidance around something more stable and less controversial:

Climate risk is financial risk.

Regardless of politics or preferences, climate-related disruptions show up in insurance markets, supply chains, physical assets, and long-term corporate planning.

Framing the transition in financial terms helps clients stay focused on what matters for their portfolios.

Real Estate Is Central, and Clients Don’t Always See It

One of the strongest messages from the panel came from Vert’s perspective:

You cannot reach net zero without transitioning buildings.

Real estate accounts for:

• ~40% of global energy use.
• ~33% of global greenhouse gas emissions.

Yet many clients still think of sustainability only in terms of electric vehicles or renewable energy.

For advisors, this is a powerful opportunity to reframe the conversation:

Real estate efficiency = lower operating costs, higher resilience, and better long-term value.

In the panel, Sam shared the well-known example of the Empire State Building’s energy retrofit, a reminder that sustainable upgrades can save money while reducing carbon.

This helps clients understand sustainability as a financial improvement story, not a sacrifice.

Advisors Should Look for “Improvers,” Not Just “Low-Carbon” Companies

A major point of frustration addressed in the panel: many investors still ask for portfolio carbon footprints as the main indicator of climate performance.

But that metric can be misleading.

For example, a commercial property company could “reduce” its carbon footprint simply by selling an old building and buying a new green one, even if doing so does not reduce emissions in the real world.

The panel’s message was clear: Transition requires progress, not purity.

For advisors, that means asking better questions during due diligence:

• Is the company actively reducing energy use and emissions year over year?
• Are they investing in upgrades?
• Are they aligned with science-based targets?
• Are they addressing risk in supply chains and physical assets?

Clients don’t need a lesson in carbon accounting; they need simple clarity:

“We look for companies that are making measurable progress, not just those that happen to look good on paper.”

Engagement Matters

The panel acknowledged something advisors may have sensed:

The industry overpromised on what engagement could achieve.

Large asset managers scaled up climate engagement in recent years, but political pushback, especially in the U.S., has caused many to retreat.

However, the panel was emphatic: We cannot abandon engagement.

Investors remain one of the few stakeholders with the leverage to guide companies toward long-term planning, disclosure, and credible transition pathways.

For advisors, communicating this to clients matters:

• Engagement is not instant.
• It is not perfect.
• But it is still one of the most effective tools investors have.

The message for clients can be simple:

“We stay invested in companies that need to change, because that’s where long-term value and long-term impact both occur.”

Language Matters More Than Ever

One of the most honest moments in the panel came from the discussion about the term net zero.

Many clients think “net zero” means:

• Giving up conveniences.
• Higher personal costs.
• Lifestyle sacrifices.

The panel recommended avoiding overly technical or politicized jargon.

Instead, advisors can reframe:

✔ Focus on financial resilience
✔ Talk about efficiency, cost savings, and risk management
✔ Use simple stories, not policy language

For example:

“Net zero” → “Helping companies modernize so they spend less on energy and remain competitive.”

“Transition risk” → “Keeping your portfolio aligned with leaders staying ahead with technological innovations.”

This shift alone can make conversations dramatically easier.

Advisors Can Play a Meaningful Role in Connecting the Dots

Throughout the panel, one theme surfaced repeatedly:

Many companies don’t fully understand how their decisions impact their customers’ ability to meet climate goals.

Advisors can help by translating between:

• Client goals.
• Regulatory expectations.
• Investment realities.
• Company performance.

When advisors connect these pieces, clients feel grounded rather than overwhelmed, and they better understand the “why” behind sustainable integration.