Oshni Arachchi, Head of Active Ownership at Danske Bank, outlines three asset management trends expected to shape 2025.
1. Shareholder rights under scrutiny
In recent years several markets—especially in the United States—have seen a shift where shareholder rights are increasingly questioned and restricted. New regulations and laws are making it harder for shareholders to influence corporate decisions in ways they could previously. Examples include tighter limits on shareholders’ ability to participate in annual meetings or to submit proposals. Some U.S. states have also adopted rules that make it difficult for shareholders to raise environmental and social issues with corporate boards.
This trend is expected to intensify heading into 2025. Companies, particularly in North America, may adopt stricter governance measures to limit outside influence. At the same time, institutional investors and activist funds are adapting by developing new approaches to preserve influence and pursue longer-term sustainability agendas. Investors therefore face a new reality: they must find innovative, compliant ways to shape corporate behavior despite growing constraints.
2. Growing demands for board diversity
Board diversity has long been a prominent topic, but it will become even more important in 2025. New European directives coming into force in 2026—requiring certain gender balance targets on corporate boards—are a clear signal of rising pressure to improve representation. The trend goes beyond gender and ethnicity; investors will push for diversity of skills and experience so boards are equipped to handle future challenges such as rapid AI advances, biodiversity issues and cybersecurity.
It is increasingly clear that representation alone is not enough. Boards must combine demographic diversity with a mix of technical, strategic and regulatory expertise to manage complex, fast-evolving risks. During 2025 investors are likely to escalate engagement with companies to ensure boards have the capabilities required for long-term resilience and competitiveness in a global market.
3. More companies revising or dropping climate targets
Climate targets and sustainability remain central topics in business. Many companies set ambitious carbon reduction goals in recent years, but 2024 saw a rise in firms revising or abandoning those commitments. For some organizations, reaching initially ambitious targets proved harder than expected; economic constraints or shifting market conditions forced adjustments.
In 2025 this issue will attract even more attention. Investors who press companies toward a green transition will face the challenge of identifying firms genuinely committed to long-term, effective sustainability investments. Some companies may retreat from earlier climate commitments or present weaker targets than anticipated. At the same time, investors will redouble efforts to push firms toward more ambitious goals, recognizing the importance of corporate action for meeting global climate objectives and ensuring a fair transition to a sustainable economy.
Heightened investor scrutiny will compel many companies to revise strategies—not only to increase transparency around sustainability work but also to meet evolving expectations for contribution to the green transition. Companies that proactively align their strategies with those expectations will be better positioned to maintain reputation and competitiveness over the long term.