As talks at the 2021 United Nations Climate Change Conference winds down, 2022 is poised to become the “show me” year for environmental, social and governance factors and sustainability measures, says Eugene Lundrigan, president of Sun Life Capital Management Inc.

This year’s conference, dubbed COP26, brought world leaders and thousands of delegates from participating countries to Glasgow, Scotland, with the goal of aligning member nations’ climate change actions with the Paris Agreement. Just as each year’s conference “raises the spectre” of how climate talk will translate into action, Lundrigan says his pension plan sponsor clients are increasingly focusing on what form ESG factors will take in their portfolios.

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“[They] are happy for us to [talk about] ESG when we’re making investment decisions, but what they truly want to understand is how exactly does it work? They want us to show them examples of how a holding made its way into their portfolio or how our credit team is working with portfolio managers to stay on top of ESG-related items or how specifically we’re engaging with issuers in the market and the related outcomes.”

While he says it’s been easy for investment managers to assign a variety of ESG initiatives over the last few years, he expects to see a lot more detailed questions from pension plan sponsors in the year ahead. “ESG and sustainability are at the forefront of how they’re thinking. A lot of [plan sponsors] . . . have made their own promises related to climate change and they’re very interested in ensuring their pension plans are aligning to their broader corporate initiatives.”

David Sheasby, head of stewardship and ESG for Martin Currie Inc., says as investors place increased importance on the disclosure of ESG and sustainability efforts, the announcement of the International Sustainability Standards Board — which aims to streamline these disclosure requirements — at COP26 was particularly noteworthy.

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“There’s a big focus on disclosure and trying to align frameworks into how and what is disclosed. I think the announcement last week [of the board] is really important and will effectively bring disclosure [frameworks] together.”

However, he cautions that many of the high-level, positive messages of COP26 come with caveats. “There have been some big announcements, but if you look under the hood, in each case, there’s a caveat. For example, the commitments on deforestation. That’s fantastic, but if you look closer, their focus is really on economic development, such as Brazil, which is talking about stopping illegal forestry. If you look at things like the commitment to stop using coal for power generation, again, there’s key actors missing from those commitments.”

Regardless, Sheasby says investors’ focus on ESG, particularly in areas such as carbon divestment and regulation, is picking up speed. “There’s a big focus on ESG investing and we’ve committed to it for over a decade. We’re going to see more growth and climate change is clearly going to be on the top of the agenda as we go into next year. . . . The momentum in ESG isn’t going away.”

Read: Canada ahead of U.S. in regulating ESG investments but more required: report