Speaker 1: ESG is constantly evolving. Over the years. It is shifted
Speaker 1: from socially responsible investing to impact to sustainable finance. While
Speaker 1: the terminology continues to change, what hasn't changed are the
Speaker 1: underlying science market pressures, tangible physical and financial impacts of
Speaker 1: the climate crisis, as well as increasing regulatory scrutiny and
Speaker 1: rising consumer expectations. We aim to filter out the noise
Speaker 1: by speaking with industry experts to identify what is really
Speaker 1: driving value. Welcome to ESG Currents, brought to you by
Speaker 1: Bloomberg Intelligence.
Speaker 2: Welcome everyone. I'm Shahin Contractor, Senior ESG analyst NYO, who's
Speaker 2: for today's episode? Today I'm joined by Sarka Gul, Global
Speaker 2: head of Sustainable Investment Manager Research at Mercer. Sarka sits
Speaker 2: at the intersection of ACET owners and mansus with a
Speaker 2: front row view into how sustainability expectations are being implemented,
Speaker 2: did in mandates and in out of pace. So today
Speaker 2: we're going to explore what's actually changing in investment mandates
Speaker 2: beyond just the ESG rhetoric, how requirements are evolving, where
Speaker 2: expectations are tightening or selfening, and how ACID managers are
Speaker 2: adapting their strategies, processes and portfolios. In response Saraca welcome, Hi,
Speaker 2: great to be here, of course, as sosartica. To kick
Speaker 2: things off, maybe the first question is from your vantage
Speaker 2: point at MERCLE, what's the most noticeable change you've seen
Speaker 2: in how ACID managers are receiving mandates or out of
Speaker 2: peace over the past twelve to fourteen months Kiven, all
Speaker 2: the stuffs happening within our world.
Speaker 3: Yeah, thanks, I guess from my perspective, the most notable change,
Speaker 3: noticeable change has really been that asset managers are increasingly
Speaker 3: receiving more sort of tightly defined or proof based rfpies
Speaker 3: that are framed around the implementation and clear outcomes than
Speaker 3: just really thinking or asking about broad ESG narratives. So
Speaker 3: in practice this potentially shows up as less generic ESG
Speaker 3: policy language, more mandate specific requirements, so clear definitions, constraints
Speaker 3: what counts in the strategy and that could be around
Speaker 3: specific topics. There are higher expectations around evidence, So give
Speaker 3: examples of how a process is put to practice. What
Speaker 3: are those investment decisions specifically around sustainability, What are some
Speaker 3: of the data aspects and how do you think about
Speaker 3: and measure sort of sustainable outcomes, So really the focus
Speaker 3: is on reducing some of that greenwashing risks. And then
Speaker 3: again more modular mandates, so clients are thinking about sustainability
Speaker 3: objectives into specific sleeves. So rather than just a broad
Speaker 3: expanse of ESG language across every mandate they are, they're
Speaker 3: focusing on specific themes and such.
Speaker 2: Okay, so I like that as moving in a less
Speaker 2: generic I think, to your point, more evidence based. I
Speaker 2: guess you know, one thing that I see is the
Speaker 2: shift in language, and you know, moving towards soft I
Speaker 2: want to call it softer labels, things like you know,
Speaker 2: resilience or I don't know, you even know what you
Speaker 2: want to call it these days. Is that something you're
Speaker 2: seeing as well? Or is this still very much defined
Speaker 2: as sustainability or ESG or these these storms that we've
Speaker 2: always seen in the past.
Speaker 3: Well, I mean you've just you've just stated to very
Speaker 3: very broad terms and so yes, it does. It does
Speaker 3: create uh, you know, confusion at times, and so really
Speaker 3: asset owners are assessing what they are aiming to achieve
Speaker 3: and then potentially moving away from language that could could
Speaker 3: be inconsistently defined globally. So what does replace it? Is
Speaker 3: is potentially universal or more financially grounded terminology I mean
Speaker 3: broadly speaking, ESG. You'll see that as being referenced less
Speaker 3: directly and instead it will be positioned as resilience. But
Speaker 3: what does that resilience mean? And this is in financial terminology,
Speaker 3: so looking for financially material aspects like transition risk, physical risk,
Speaker 3: regulatory risk, you know, supply chain things like that. So
Speaker 3: it becomes quite specific and therefore the questions then, you know,
Speaker 3: shift from do you have a policy or how do
Speaker 3: you think about this? To you show me how these
Speaker 3: risks are being identified and managed in the investment process.
Speaker 3: You know, there are other terms that you know that
Speaker 3: managers are no longer using, so diversity, equity, and inclusion.
Speaker 3: You know, the underlying intent often remains, but the language
Speaker 3: does tend to center on terms like culture or inclusion
Speaker 3: or belonging, so it becomes a lot more granular in
Speaker 3: terms of what they're trying to define rather than an
Speaker 3: umbrella term of DEI.
Speaker 2: I see and I guess so you coverle You know
Speaker 2: this this field from a global lens, So are you
Speaker 2: seeing differences in a sort of global expectations in case
Speaker 2: of how these mandates are written, for example, as Europe
Speaker 2: doming things differently than Asia versus the US, any trends
Speaker 2: over there.
Speaker 3: Yeah, absolutely, I mean there are regional differences and so
Speaker 3: global managers are really then having to adapt. So the
Speaker 3: underlying building blocks tend to be similar in terms of
Speaker 3: what they're trying to achieve, But then what gets emphasized
Speaker 3: and how it's done, how prescriptive it could get, and
Speaker 3: what goods looks like can vary by region, you know,
Speaker 3: and I guess some examples you could see Europe. They
Speaker 3: do tend to be much more focused on net zero,
Speaker 3: on nature, and they're much more disclosure driven, and so
Speaker 3: this could mean explicit language around these terms, what does
Speaker 3: that zero look like, what are the transition pathways? How
Speaker 3: do you manage to think about portfolio alignment? So we're
Speaker 3: seeing more sophisticated conversations around these and it's not just
Speaker 3: so it's not just about climate, it's broadened into other
Speaker 3: environmental aspects, other regions. You know, you think about Australia
Speaker 3: on one hand, Canada and the other. Historically, Australia has
Speaker 3: had a very strong focus on modern slavery and so
Speaker 3: that has that has been present in mandates and due
Speaker 3: diligence process as well, and so managers there often have
Speaker 3: to demonstrate how they're identifying and managing these risks. And
Speaker 3: then in Canada, you know, manages could span both sort
Speaker 3: of the integration and the impact aspect, with some emphasis
Speaker 3: on climate, but we're seeing much greater focus on indigenous considerations,
Speaker 3: you know, topics like inequality and social justice, and so
Speaker 3: you know, ask then is how is this embedded into
Speaker 3: you know, the investment process, into the research, into the
Speaker 3: risk into the stewardship components. I guess broadly, local impact
Speaker 3: is another one. You know, global managers are seeing, you know,
Speaker 3: the need to adapt there so they can apply global principles,
Speaker 3: but the solutions the stakeholders are quite local and so
Speaker 3: again that focus on community impact that could be quite
Speaker 3: different depending on the region. And so all that to say,
Speaker 3: you know, managers are really thinking about and needing to
Speaker 3: have a core global approach, but with regional overlays so
Speaker 3: that the language, the stewards of focus areas, the local
Speaker 3: impact approach reporting can meet some of these local mandate
Speaker 3: expectations without sort of having a different process everywhere.
Speaker 2: That's super interesting, and I want to shift a little
Speaker 2: into sort of strategies. So based on art if it
Speaker 2: is received by managers, are you seeing any changes in
Speaker 2: where capital is being allocated by astonus? So you know,
Speaker 2: I think of private market shafts, I think of thematics,
Speaker 2: So just any broad observations over.
Speaker 3: There, yes, I mean an acutally, I do think we
Speaker 3: are seeing more queries and interest and increased interest in
Speaker 3: the private market space. But that's not to say that
Speaker 3: interest in public markets has gone away. It's that the
Speaker 3: incremental new idea flow and the curiosity definitely feels stronger
Speaker 3: in private markets. And this is especially as asset owners
Speaker 3: are really aiming to be much more intentional about where
Speaker 3: impact can be sorry potentially essentially can be made more
Speaker 3: clearly and sometimes closer to home. Again, so bringing that
Speaker 3: local component back into it, you know, potential interest in
Speaker 3: private markets. We've seen areas like private debt nature again
Speaker 3: that local impact aspect that are coming true. But again
Speaker 3: public markets is still very much in the mix, but
Speaker 3: the conversations are quite different. So a few years ago
Speaker 3: we probably did see more public markets manager selections around sustainability,
Speaker 3: and that makes sense again investors really thinking about and
Speaker 3: making commitments and then going sort of what we see
Speaker 3: as low hanging fruit, which meant you know, reviewing existing
Speaker 3: lineups within the equity mandates or their fixed income mandates,
Speaker 3: making tweaks with what they already allocate to. So the
Speaker 3: implementation aspect, you know, what kind of impact does does
Speaker 3: an exclusion or an integration framework make and then potentially
Speaker 3: switching to more passive allocations that are sorry to more
Speaker 3: passive sustainable allocations from their core passive and then also
Speaker 3: again adding to the active sustainability our ideas. But again,
Speaker 3: what feels different now is that impact lens and so
Speaker 3: there's much more explicit thinking about where and how impact
Speaker 3: can be made, and that is paired with the increasing
Speaker 3: availability and ideas that we're seeing in private market solution
Speaker 3: and so that's driving more time just on understanding that
Speaker 3: opportunity set, what exists, what is credible, what does it
Speaker 3: take to implement well, so you're kind of seeing a
Speaker 3: two track approach across the public markets from a breath
Speaker 3: and stewardship perspective, and then private markets are more targeted
Speaker 3: measurable outcomes.
Speaker 2: And I think those two go hand in hand, right,
Speaker 2: the impact on the private markets, because as you mentioned,
Speaker 2: how do I say there's people think that you can
Speaker 2: make sort of deeper, more targeted impact within the private markets,
Speaker 2: and the public markets is slightly harder.
Speaker 3: And that does depend on how you define impact. And
Speaker 3: again from the asset owner perspective, what kind of impact
Speaker 3: are you looking for?
Speaker 2: Yeah, fair enough, So I guess I going to come
Speaker 2: to more of the processes. So compared with a few
Speaker 2: years ago, what are managers now being asked to demonstrate
Speaker 2: in r fees in terms of process, data or accountability?
Speaker 2: You know, somebody once told me that when it comes
Speaker 2: to data, you know, if you rely on one source
Speaker 2: of you know, data, it's it's a flag. It should
Speaker 2: be multiple sources or no data. I'm just keen on
Speaker 2: understanding how that sort of angle is going.
Speaker 3: I mean, in terms of what managers are asked to demonstrate,
Speaker 3: it come back to, you know, just being much more
Speaker 3: evidence based. But don't you know, the ask is very
Speaker 3: much don't just talk about the process, but show me
Speaker 3: the evidence. You know, I guess managers are really pushed
Speaker 3: to to show what has changed in the last few
Speaker 3: years that actually strengthens their outcomes or creates an edge.
Speaker 3: And I mean some of this is not necessarily new.
Speaker 3: It comes through in you know, the specialist expertise. There's
Speaker 3: deeper sector, asset class coverage, dedicated analysts, you know, much
Speaker 3: more depth to it. There is now more focus on
Speaker 3: proprietary data and tools. I mean we've seen you know,
Speaker 3: significant expansion in ideas across the you know, what managers
Speaker 3: are doing and how they're approaching proprietary models. And again
Speaker 3: it's not just a proprietary ESG model. It is looking
Speaker 3: at in depth topic. It's looking at topics in depth. Right,
Speaker 3: So you know, look at climate transition, what are the
Speaker 3: components of climate transition and what data provideers you know,
Speaker 3: have this kind of information in place, how are you
Speaker 3: thinking about adaptation and physical risks? You know, what are
Speaker 3: some of those data points related to nature? So it's
Speaker 3: it's quite it's quite granular. And we've seen managers you know,
Speaker 3: developing some really interesting proprietary tools that are much more
Speaker 3: forward looking and much more realistic or reflective i should say,
Speaker 3: of real world outcomes rather than you know, thinking about
Speaker 3: and relying on backward looking at ESG scores. That's probably
Speaker 3: you know. And then in mind with that is I
Speaker 3: guess accountability. You know, who is accountable when it comes
Speaker 3: to the over investment process, So this is not just
Speaker 3: about the data piece, but who is accountable and how
Speaker 3: are our investment decisions made? You know, I guess for
Speaker 3: impact ideas, again, that bar is higher when it comes
Speaker 3: to you know, asks around clarity and credibility. You know,
Speaker 3: asset owners are looking or clearly articulated impact theory of change.
Speaker 3: What are the specific objectives and then what does a
Speaker 3: credible reporting look like? And you know what makes sense?
Speaker 3: And that includes case studies, so that evidence component is
Speaker 3: really is really critical.
Speaker 2: I see, And I guess is there any you know,
Speaker 2: one piece where asset managers are finding more flexibility from
Speaker 2: asset honest you've talked about evidence space, maybe moving from
Speaker 2: genetic to I think more specific like you know you
Speaker 2: said in that zero et cetera. Is there any other
Speaker 2: place where it's another right would but maybe flexibility?
Speaker 3: Yeah, I guess some flexibility. You can think about flexibility
Speaker 3: round engagement, like what kind of engagement methods do managers have,
Speaker 3: how are they prioritizing, what are some of the escalation pathways?
Speaker 3: I mean, there's no one set approach, and so I
Speaker 3: think asset owners are flexible on that. But that's provided
Speaker 3: that managers can actually evidence a credible process and outcomes
Speaker 3: over time. So again just thinking about engagement with objectives
Speaker 3: in mind. I guess one area, you know, we are
Speaker 3: seeing the spokes solutions that are becoming part of the conversation.
Speaker 3: So it's less about mandate selection but more so focused
Speaker 3: on manager selections. So they're looking for that manager alignment
Speaker 3: and ability to execute, and that just means that asset
Speaker 3: owners are effectively developing their own fund design but looking
Speaker 3: for managers who can implement this. So you know, again
Speaker 3: they're not thinking about an off the shelf type of strategy,
Speaker 3: but really focusing on the alignment aspect the experience. How
Speaker 3: can you operationalize a custom set of constraints that we
Speaker 3: have and so on the one hand, these r fees
Speaker 3: can be quite specific and so they do require back
Speaker 3: and forth between the asset only and the asset manager
Speaker 3: and that includes running stimulations, you know, based on the
Speaker 3: criteria that they have is well as some of their
Speaker 3: portfolio implications or consequences. And so the flexibility then comes
Speaker 3: around potentially tweaking some of the criteria on aspects like
Speaker 3: you know, streams or increasing exposure to certain solutions or
Speaker 3: best in class ideas or sort of thinking about what
Speaker 3: that you know, transition piece might look like. So where
Speaker 3: do they set the bar? You know, so there's there's
Speaker 3: a bit of bracket back and forth just to get
Speaker 3: that to get to a place that aligns with what
Speaker 3: asset owners are looking for.
Speaker 2: I see. So, you know, you spoke about ways in
Speaker 2: which sustainability can be integrated, can be expressed. So there's integration,
Speaker 2: this chematic allocation, this engagement. I guess, how do managers
Speaker 2: decide how sustainability is expressed in portfolios? What trade offs
Speaker 2: usually dry that choice? And right now is one being
Speaker 2: expressed more than the other?
Speaker 3: Yeah? I think I would see this as sort of
Speaker 3: think about the investment propositions as a whole. You know,
Speaker 3: if you if you kind of look at the investment
Speaker 3: landscape around ESG and sustainability. There are two ways that
Speaker 3: I think about this, and one is really what applies
Speaker 3: to all investment ideas, and that's the integration piece. And
Speaker 3: then there's that component around what applies to just a
Speaker 3: subset of the opportunity set, and this is really then
Speaker 3: getting into the variations of sustainability themes on integration. This
Speaker 3: is again this is probably this has become mainstream. You know,
Speaker 3: fifteen years ago there was there was very clear differences
Speaker 3: in how managers were approaching you know, the integration aspect.
Speaker 3: Today this is almost part and parcel of you know,
Speaker 3: the due diligence the investment process, and part of that
Speaker 3: is just because of the data availability and everything that
Speaker 3: we see happening in the world today. You know, there
Speaker 3: is a potential for external factors that can affect the
Speaker 3: value of a company, and so regardless of beliefs, portfolio
Speaker 3: managers need to be thinking about that potential impact on
Speaker 3: the corporate value of a company. So the question there
Speaker 3: is then how are managers integrating these financially material risks
Speaker 3: into their deep diligence And so that's kind of become commonplace.
Speaker 3: But then there is the opportunity set across sustainability themes,
Speaker 3: and this has also evolved and it's become you know,
Speaker 3: it's kind of moved from just a broad sort of
Speaker 3: sustainability bucket to how we see sort of a variation
Speaker 3: of approaches, you know, and that's thinking about ideas across
Speaker 3: transition and impact. And again these are ideas that are
Speaker 3: focused specifically on thematic allocations, but managers offer ideas using
Speaker 3: slightly different approaches. Now, this is a super interesting area
Speaker 3: because we are seeing a lot of evolution, But I
Speaker 3: wouldn't necessarily say that they're focusing on the trade offs
Speaker 3: in order to drive the choice because in some cases,
Speaker 3: this is where we see managers really being forward thinking
Speaker 3: in identifying and capturing that opportunity set. So we've seen
Speaker 3: a number of new ideas emerging as a function of
Speaker 3: broader initiatives and global agreements. Right, so you think about
Speaker 3: the Sustainable Development Goals or the Paris Climate Agreement or
Speaker 3: the Global Biodiversity Framework. I mean these are agreements that
Speaker 3: have really led to a number of different initiatives, such
Speaker 3: as the TCFD, the TNFD, engagement on these topics by managers,
Speaker 3: and then managers subsequently really developing investment strategies around diversified themes. Now,
Speaker 3: you know, they could potentially be ahead of the curve,
Speaker 3: but it's a way for them to also understand the
Speaker 3: investment universe, to learn what companies are doing, what does
Speaker 3: best in class look like, you know, where are some
Speaker 3: of those risks and where companies are potentially not doing well,
Speaker 3: and then later thinking about that opportunity set when it
Speaker 3: comes to the solutions providers, and then as the rest
Speaker 3: of the industry picks up, you know, you'll see asset
Speaker 3: owners then asking more questions about this, and sometimes it
Speaker 3: leads to, you know, particular mandates, and sometimes it's just okay,
Speaker 3: I want to understand how managers might be integrating these risks.
Speaker 3: So would they take that financial materiality aspect and say, like,
Speaker 3: how are you thinking about this across a mainstream or
Speaker 3: core portfolio rather than something that is more thematic?
Speaker 2: Okay, and maybe just one photo of questions. You spoke
Speaker 2: about the themes and you know, these new innovative ideas
Speaker 2: that are coming out. Is there any one direction that
Speaker 2: you think the market is moving to us, or you know,
Speaker 2: any interesting themes that have come to light that have
Speaker 2: caught your eye. I'm thinking I see really far out things,
Speaker 2: So I'm just curious as to what you're actually seeing
Speaker 2: on the ground.
Speaker 3: Again, I think it's just a function of what some
Speaker 3: of the regions are looking at how thinking about this.
Speaker 3: I'm based in Canada, so there is a significant focus
Speaker 3: on just understanding you know, indigenous considerations. What does that
Speaker 3: mean from a from an investment perspective. We're in I mean,
Speaker 3: i'd say for the for the masses, we're in a
Speaker 3: learning stage and so it's you know, it's sort of
Speaker 3: a step function in terms of getting to that point
Speaker 3: of really understanding that an opportunity set that can kind
Speaker 3: of get out to the masses. But it you know,
Speaker 3: it does end up becoming quite region specific in terms
Speaker 3: of new ideas.
Speaker 2: I see, Okay, I guess you know, despite I think
Speaker 2: this goes back to maybe some of my first few questions,
Speaker 2: but despite this noise around ESG, I guess what has
Speaker 2: stayed consistent? What do mandos need to have regardless of
Speaker 2: everything going on?
Speaker 3: I mean, a clear process in place? I mean in
Speaker 3: terms of what has fayed consistent. You know, we, I
Speaker 3: guess from our perspective, we look at investment ideas. We
Speaker 3: follow a relatively structured process and that's really then assessing
Speaker 3: the underlying investment capability or the strategy that the manager
Speaker 3: has in place, right, and so that captures aspects like
Speaker 3: idea generation. So what is your philosophy? You know, what
Speaker 3: is the investment process? You know, what do you see
Speaker 3: as having you know, within your process that gives you
Speaker 3: a competitive edge? You know, what kind of resources do
Speaker 3: you have in place that kind of captures, broadly speaking,
Speaker 3: the idea generation component. And then you've got portfolio construction,
Speaker 3: which is then translating these ideas into a portfolio that
Speaker 3: is reflective of your investment philosophy. You know, the implementation aspects,
Speaker 3: So thinking about the trading, the turnover, how much are
Speaker 3: you actually using in turnover in terms of costs and such?
Speaker 3: You know, what are the fees of strategy and such.
Speaker 3: And then overarching all of that is the business management aspect. Right,
Speaker 3: We're looking for stability of the business, a strong environment
Speaker 3: and culture, and just good alignment between between investors you know,
Speaker 3: and their underlying base. So you know, in terms of
Speaker 3: consistency from a manager perspective, you know, we always continue
Speaker 3: to see managers, any new idea that comes out really
Speaker 3: follows that overarching approach. Now, there are obviously nuances in
Speaker 3: terms of new ideas, but then that I would see
Speaker 3: a number a bit of that coming through in the
Speaker 3: idea generation component. Right, how are you identifying ideas as
Speaker 3: it relates to a particular theme or a new area?
Speaker 2: I see. So it sounds like, you know, the typical
Speaker 2: sort of what makes a good manager a good venture right,
Speaker 2: The competitive advantage, implementation, et cetera.
Speaker 3: That makes sense just to say, like within the sustainability component,
Speaker 3: like there is there's like there's evolution there and some
Speaker 3: of that is coming through. And you know, again you
Speaker 3: see a lot of industry initiatives around understanding the impact.
Speaker 3: Now you know, some of this again is kind of
Speaker 3: focused on the product market side. But how do you like,
Speaker 3: what is that intentionality you think about, you know, intentionality, materiality,
Speaker 3: additionality and such. You know, it's that kind of framework
Speaker 3: fits within this overarching sort of four factor and and
Speaker 3: how we would assess investment ideas and such. It's just
Speaker 3: kind of building it into that framework with those additional
Speaker 3: nuances that are specific to impact strategies and sustainability games.
Speaker 2: I see, Okay, I guess you know how and maybe
Speaker 2: you've answered this question in thought, But how have any
Speaker 2: of these you know changes, this this shift from genetic
Speaker 2: domes let's just call it genetic the more you know
Speaker 2: chematic or defined domes. How is that altered? How morech
Speaker 2: so evaluates or differentiates managers in practice? Just if you
Speaker 2: put like a broad brush over anything that's changed.
Speaker 3: No, I mean again, it kind of comes back to
Speaker 3: you know, the components we're looking at investment strategies, you know,
Speaker 3: so that kind of takes that global approach, right, what
Speaker 3: is it that the manager is offering? The regional variations
Speaker 3: can become quite specific, and so you know, I guess
Speaker 3: the key question that we ask if managers are tweaking
Speaker 3: anything for within a strategy to to make it work
Speaker 3: in a particular region is how much of that potentially
Speaker 3: affects the investment universe. And so you know, you need
Speaker 3: to if you're if you're changing, if you're completely changing
Speaker 3: the approach you know for a region, then obviously it's
Speaker 3: a completely different strategy. But if you have a global
Speaker 3: strategy with regional variations, you know, are focuses very much
Speaker 3: on understanding that global approach, because then the regions become
Speaker 3: quite specific and quite kine specific.
Speaker 2: I see. And maybe my last question just to wrap
Speaker 2: it up, So if you looked at a typical mandate,
Speaker 2: you know, two years from now, what do you think
Speaker 2: is going to look different? What is versus what do
Speaker 2: you think is going to surprise you by staying the same?
Speaker 3: What is potentially going to look different? I mean again,
Speaker 3: I think there'll probably continue to be evolution around proof
Speaker 3: what does how do you define proof? How do you
Speaker 3: look at the outcomes of a process. So again we
Speaker 3: continue to move less away from policy language to what
Speaker 3: is more decision useful reporting and sort of you know,
Speaker 3: circling back to the investment idea generation. You know, we'll
Speaker 3: see evolution in clear metrics or methodologies, potentially hopefully consistency
Speaker 3: and of the reporting, you know, And and I guess
Speaker 3: the focus is very much on proof and how it
Speaker 3: ties back to portfolio decisions. I expect will also continue
Speaker 3: to see evolution in themes. So it's not necessarily different.
Speaker 3: I mean, if there's anything I could say is that
Speaker 3: we've continued to We've evolved, and we continue to evolve
Speaker 3: in you know, within this space. So I do expect
Speaker 3: to see a number of new themes, you know, continuing
Speaker 3: to be added to the roster. And so what that
Speaker 3: means is then how clients think about prioritizing prioritizing this,
Speaker 3: And so we'll continue to expect to see managers or
Speaker 3: mandates being more explicit about what counts and how themes
Speaker 3: are implemented in terms of you know, whatevers. Expect to
Speaker 3: stay consistent. You know, I think that we've seen this
Speaker 3: happening over the last couple of years as well. I
Speaker 3: think for ATHID owners really who have been doing this
Speaker 3: for a while, the story is steady. They are continuing
Speaker 3: to maintain the course, and i'd expect to see that
Speaker 3: continuing to be the case. Market rate expectation, market rate
Speaker 3: return expectations, i should say, are still the baseline. So
Speaker 3: even with where you've got sustainability objectives, you know, experienced
Speaker 3: asset owners really are clear that they're generally looking to
Speaker 3: generate this market rate return and want to do that
Speaker 3: with the right managers over the long term. And so
Speaker 3: what that means is a sort of you know, i'd
Speaker 3: expect to see that to continue to be the case,
Speaker 3: where it is very much about sustainability, returns and risk
Speaker 3: and not. You know, it's basically the three having an
Speaker 3: equal and consistent focus across the three of these. So
Speaker 3: it isn't new, it hasn't necessarily shifted significantly, and I'd
Speaker 3: expect it continue to stay consistent.
Speaker 2: Makes sense, Thank you, Sarka. And I think you know,
Speaker 2: my big takeaways were the shift towards more evidence space.
Speaker 2: You know, you spoke about more generic let's just call
Speaker 2: it generic requirements to more sort of, I guess target
Speaker 2: is strategies in a way and targeted questions evidence space,
Speaker 2: so that that was a big takeaway for me. And
Speaker 2: with that, I want to thank you for joining and
Speaker 2: for our listeners. You can find more information on sustainable
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