ESG Currents
Inside the RFP - Expectations for Asset Managers
Why It Matters
The shift forces asset managers to upgrade data, reporting and process capabilities, directly influencing capital allocation and competitive positioning. It signals a market‑wide move toward accountability and reduces green‑washing risk.
Key Takeaways
- •RFPs require evidence‑based sustainability outcomes
- •Mandates split into modular ‘sleeves’ for specific goals
- •Regional nuances shape ESG language and focus areas
- •Private market impact investments gain measurable traction
- •Integration remains core; thematic layers add diversification
Pulse Analysis
The latest wave of ESG RFPs reflects a decisive turn from aspirational language to evidence‑based requirements. Asset owners now ask managers to demonstrate how sustainability risks—such as transition, physical, and regulatory factors—are identified, quantified, and integrated into investment decisions. This demand for granular data and clear outcome metrics reduces green‑washing concerns and pushes managers to develop proprietary tools, forward‑looking models, and case‑study‑rich reporting. The modular "sleeve" approach further fragments mandates, allowing investors to target specific resilience or impact objectives without overhauling entire portfolios.
Regional differences amplify the complexity of meeting these mandates. European investors prioritize net‑zero pathways, nature‑related disclosures, and strict transition metrics, while Australian owners focus on modern‑slavery due diligence and Canadian clients embed indigenous and social‑justice criteria. Managers must therefore construct a robust global ESG framework that can be overlaid with local specifications, ensuring consistency without reinventing core processes. This layered strategy demands cross‑functional coordination, from research and risk teams to stewardship and client‑facing groups, to satisfy diverse regulatory and cultural expectations.
Capital allocation trends reveal a dual‑track strategy. Public‑market integration remains essential, but the appetite for private‑market impact investments—particularly in debt and nature‑focused projects—has surged as investors seek tangible, localized outcomes. Managers are blending traditional ESG integration with thematic overlays, expanding opportunity sets while adhering to frameworks like the SDGs, Paris Agreement, TCFD, and TNFD. Looking ahead, mandates will likely embed clearer metrics, decision‑useful reporting, and new thematic sleeves, yet the foundational pillars of market‑rate returns, risk management, and sustainability will stay constant. This evolution underscores the need for asset managers to invest in data infrastructure, transparent governance, and adaptable processes to stay competitive.
Episode Description
Sustainability is moving beyond high-level ESG rhetoric and becoming more embedded in how investment mandates and RFPs are structured — but what is actually changing in practice? In this episode of the ESG Currents podcast, Sarika Goel, global head of sustainable investment manager research at Mercer, joins Bloomberg Intelligence Senior ESG Analyst Shaheen Contractor to unpack how sustainability expectations are shifting within investment mandates and manager selection. They explore how ESG requirements are being reframed — and where expectations are tightening or softening. The discussion also examines how these shifts are influencing portfolio construction, from integration to thematic allocations and private markets exposure, as well as regional differences in mandates. Finally, they consider what has remained consistent despite the noise and what the next generation of mandates may look like.
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