Sustainable Investment for Hedge Funds

UCIM has published what it believes are the first set of holistic principles for asset owners applying sustainability considerations to hedge funds, covering emissions measurement, reporting, and stakeholder engagement.

The principles offer a simple and practical approach that can develop into an industry consensus. UCIM encourages like-minded investors to endorse and adopt these principles to support a more consistent approach to measuring and managing greenhouse gas emissions associated with hedge fund managers.

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As of July 2026, the global hedge fund industry managed a record aggregate total of $5.6 trillion¹, representing an increase of $642.8 billion over the prior twelve months.  Although some helpful guidance has been published, there remains no established consensus on how asset owners should measure, manage or report greenhouse gas emissions associated with hedge fund strategies.

As a result, many investors either exclude hedge funds from their emissions reporting, or else rely on unpublished internal approaches to tackle the asset class. The principles outlined in the white paper, developed with substantial input from peers, including university endowment and pension funds, offer a solution to this problem.

QUOTE TO BE ADDED

UCIM believes that performance and sustainable investment go hand in hand – companies making the transition to clean energy will be the ones that deliver value to investors, as well as society. As both owners (or funders) of companies and important liquidity providers to global capital markets, hedge funds and credit investors have a crucial role to play in supporting this transition.

Applying the principles to its portfolio of hedge fund managers, UCIM asses investment strategies against four qualitative considerations to distinguish between those capable of delivering real-world change and those with limited impact. This allows UCIM to determine the optimal level of engagement and monitoring, to maximise real-world decarbonisation.

¹ _{HFR’s Global Hedge Fund Industry Report, July 2026}