Investors want to explore how they can combine a financial return with sustainability objectives and outcomes, and demonstrate real-world impact. Comprehensive sustainability reporting at the fund level is a minimum expectation, and there is a seismic shift happening toward providing quantitative data to demonstrate performance. Net zero remains a hot topic. We are also receiving increasingly sophisticated information requests from investors on climate reporting. Having basic carbon footprint and greenhouse gas emissions (GHG) data is the bare minimum, and over time scope 3 will become an expectation.

We’ve started receiving requests from investors about implied temperature rise and whether we have targets under the Science-Based Targets initiative (SBTi), and whether we can report on Climate Value at Risk (VaR). We’ve also started having conversations around fossil fuels and our views on divestment versus engagement and stranding risk. Regular and structured engagement is also increasingly expected, with the expectation that firms have fund-level stewardship priorities in place and specific engagement objectives, along with a clear direction on what they want to achieve and how they are measuring and tracking progress.

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