However, ESG can vary by asset class. “Insurance funds have taken an active interest because the millennial generation is a significant portion of their customer base.” Equities and fixed income have also been active as it was in these public markets that ESG first took hold. However, private assets can take longer. “Investors first entered private assets for yield, so the financial concern was paramount,” she explained.

A convergence is taking place around article 8 funds--those that promote ESG characteristics--with some downgrades from 9--those with a specific ESG objective. “As an industry, we can be comfortable with that convergence as long as, in addition to the article, we give investors full insight into our methodology,” said Niemczyk.

The challenge in 2023 is finding better data and a common approach. “Biodiversity will be a big topic in 2023. However, it’s difficult to quantify. We anticipate different models put forward by different players for biodiversity in 2023.”