PGIM’s “Paris-aligned” investments rose by 46 percent in just a year, according to its latest sustainability report.
The $1.4 trillion asset management arm of Prudential Financial revealed that its allocation to assets deemed to be aligned with the Paris climate agreement hit $25 billion in 2025, up from the $17.2 billion it reported for 2024.
The manager has not responded to a request for more information on what is behind the increase.
PGIM’s 2024 ESG Investing Report set out definitions under its proprietary ESG Taxonomy, in which Paris-aligned investing was defined as “implementing a decarbonisation strategy for a portfolio to achieve a temperature scenario of well below 2C”.
This can be achieved using different approaches, the asset manager noted, including reducing financed emissions or emissions intensity, decreasing portfolio temperature or directing investments towards low-carbon technologies.
The latest report refers to a Sustainability Taxonomy rather than an “ESG” framework, but it uses the same categories.
PGIM also revealed that its impact investments dropped by close to a third, down from $1.4 billion in 2024 to $1 billion last year.
Strategies with a “positive alignment” – where the portfolio or investable universe is “constructed or tilted based on positive ESG characteristics or performance of assets or investments” – increased to $38 billion from $29.4 billion over the same period.
Overall, PGIM revealed that around 36 percent of its total assets are in portfolios with “binding sustainability features”, while nearly 90 percent ($1.3 trillion) have “material sustainability factors” integrated into the investment process.
Feasibility of 1.5C
PGIM also revealed that it held round tables last year to discuss the feasibility of climate targets with clients in the UK, Australia and Canada – including “whether 1.5C remains a credible reference point for portfolio alignment and what alternative assumptions should inform investment decision-making”.
“A clear point of consensus was the need for transparency about what investors can and cannot realistically influence, particularly on systems-level outcomes,” it added.
The manager joined several new initiatives in 2025, including the Partnership for Biodiversity Accounting Financials, the Methane Abatement Financing Taskforce and the Emerging Markets Investors Alliance.