Transcript by Kensho.

Lindsey Hall: Hi, I'm Lindsey Hall, Head of Thought Leadership at S&P Global Sustainable1.

Esther Whieldon: And I'm Esther Whieldon, a Senior Writer on the Sustainable1 Thought Leadership team.

Lindsey Hall: Welcome to ESG Insider, a podcast hosted by S&P Global, where we explore environmental, social and governance issues that are shaping investor activity and company strategy. This is an exciting week for us. We just hosted our first ever ESG Insider live event. And that means we brought our show on the road to New York City to host interviews in front of a live audience. Well, in today's episode, we're going to be bringing you the highlights from those interviews.

Esther Whieldon: Yes, we're at this pivotal moment for the sustainability world. We're hard on the heels of COP27, the big UN Climate Change Conference. Earlier this week, the UN's Biodiversity Conference, that's COP15, kicked off in Montreal. And we're heading into 2023. We were really lucky at this event to have some amazing speakers, who talked to us about these big events and also about what to expect as we look ahead.

Lindsey Hall: First up today, we'll hear from Amy Hepburn. Amy is the CEO of the Investor Leadership Network, which is a coalition of institutional investors, representing more than $10 trillion in assets. We'll hear also from Evan Harvey, who after two decades at NASDAQ has now joined Deloitte as Managing Director of Sustainability and ESG Services. And finally, we sat down with Marina Severinovsky, Head of Sustainability North America at Schroders, an asset management firm with more than $939 billion in assets under management.

Esther Whieldon: So Lindsey, I have to say this was really fun and a really different experience recording this podcast live in front of an audience.

Lindsey Hall: Yes, definitely different from being in our home offices and really special to get to actually be in the same place as you for once when we're doing these recordings.

Esther Whieldon: Exactly. We didn't have to contend with kids asking for popsicles or my dogs snoring on the bed.

Lindsey Hall: Yes, definitely a learning experience, definitely a little challenge because it was pouring down rain in New York City, all day leading up to the event. We weren't quite sure who's going to show up, but we were still lucky. We had this full house, this really engaged, energetic audience. And so I just want to say a big thank you to everyone who attended. If you couldn't make the live event, don't worry, we're hoping that this will be just the first of many future ESG Insider live podcasts.

And so with that, let's turn to that first interview with Amy Hepburn. Amy was fresh back from COP27 in Egypt, and she shared some unique perspective on the event. Here's Amy.

Amy Hepburn: There were some wins and losses, right? One of the big wins was around loss and damages, right? I mean that conversation, I was talking to many of my members. And like you said, the ILN is 13 members. They represent $10 trillion assets globally invested in every market, in every region, and our representation is across the G7. So they were also -- many were at COP and many I was able to represent when I was there, if they weren't able to physically be there. And I said, "The fact that loss and damages was on the agenda was quite interesting. And then this conversation of no more plans about us without us was a big theme of COP."

So I think there's some deliverables around that, that we'll have to really count on and look forward to see if money goes into that loss and damage fund. But I think that the fact that the conversation has evolved is new. It was not prominent -- as prominent last year in Glasgow.

I think the other big takeaway for me was around blended finance. The joke at COP amongst the investors was you'd say to someone like, "What did you have for breakfast?" They said, "Blended finance." And you'd say, "How was your day?" And they'd say, "Blended finance."

And it was -- I felt like all we talked about public-private partnerships, how are we unlocking capital in emerging markets, what are the new ideas, how is government coming together in partnership with private investors, how are we really thinking differently about private capital mobilization. This is something we got excited about last year as investors. We were invited to the table. And I felt like this COP was where we were really talking turkey. Like we were really looking at what needs to be done. The conversations were extremely practical, extremely tactical. And I think investors left quite enthused about the possibilities.

Lindsey Hall: Okay. So am I hearing you correctly, it sounds like you're saying moving from just sort of high-level goal setting? Which is something we have to contend with in the sustainability space with actual action and movement. Am I hearing you correctly?

Amy Hepburn: Yes, absolutely. I mean I was in a meeting with John Kerry. And one of the main conversations that's taking place in the blended finance space is around development finance institutions and the MDBs. And they have a mandate and a lot of pressure right now to mobilize private capital and what are some ideas for doing that.

And John Kerry said, "Listen, there are going to be some big changes coming this spring." That was the first time we had heard this from him. He said there will be some big changes coming this spring around private capital mobilization and development finance institutions. And he was on stage, to his left with Kristalina Georgieva, and she was vigorously shaking her head, and he said, "One of the most powerful women in finance is on stage with me and in agreement. This is coming. This is happening. We hear you around derisking capital. We hear you around project pipeline and data transparency, and we're working on it. So stay with us, and we're coming together in partnership."

Lindsey Hall: Okay. So it sounds like some positives. Let me ask you though, where are the continued blockers? Where do you see potential hurdles remaining?

Amy Hepburn: Yes, it's interesting. There were 2 really provocative kind of statement/thoughts that came out of COP for me. And one is that -- and this came from the investors themselves. They said, "We need to make the right thing to do, the easy thing to do. And we haven't done that yet." And particularly, there was a heavy emphasis on transition finance. How do we move our assets from gray to green? What does good look like in the transition space? And there was a lot of talk about it.

We need -- we're investing in transition plans. We're looking at transition plans. We're focusing on this as asset owners with our portfolio companies and with our assets. But then one of the investors, who's a member of ours, looked out in the room like this and said, "How many of you have ever done a transition plan for your company?" And there was like not a hand in the room that went up. Then, "How many of you even looked at a good transition plan and can stand up here and tell me what you think a really good transition plan looks like?" And no one raised their hand.

So then we -- he said, "This is the issue, right? We know what we need to do, but we need to make the right thing the easy thing to do. So how do we do that?" And I think that is a fundamental challenge right now. And I think it's one that we, as investors, need to take to heart. Like how do we streamline our efforts? How do you move from good intentions to actual progress and impact?

And then the other point that came that I thought was very provocative was one of our investors sat on a panel and he represents one of the largest pension funds in Canada, and he said, "We are at a crisis of trust. We are operating under a deficit of trust. Deficit of trust between investors and governments and a misunderstanding of the roles of both in this conversation around blended finance. A deficit of trust between investors and their beneficiaries, right? A deficit of trust between every single actor of society, right? And we're expected to come together."

And I know I've shared with you before, I really believe in the 3 Cs: collaboration, cooperation and creativity. This is what we need to have happen to make progress for climate finance. And if we're not going to go from billions to trillions, unless we do, we need those 3 Cs. But those 3 Cs rest on trust. They are built on trust, and we are operating under a deficit of trust. So how do we build trust? And so I think that -- and I could talk more about it. But I think just in short, that is a real blocker for progress, is sitting around the table with different voices and really trusting each other to be creative and to collaborate and be cooperative.

Lindsey Hall: So I think you are in a really interesting position, given your role at the head of the ILN to see where that trust might break down. And I'd love to know, what did you see on the ground at COP? Did you see this kind of -- the 3 Cs you're talking about, was that happening? Or was there this continuing lack of trust apparent?

Amy Hepburn: Yes. I mean I think one of the things I liked about trust -- actually, one of the -- one of our members, when I asked him, I said, "What is your goal of COP?" And he said, "My goal here in Egypt for the next 7 days is to talk to everybody I wouldn't normally talk to as the CIO of a major fund." And I thought, what a good answer, right? And he had all the time in the world for every single -- whether it was an NGO or a government or anyone who came up to him after a panel and just said, "Yes, let's talk. Tell me how do you think about these issues?"

And so that -- COP provides you that opportunity to be in a space where so many different sectors interact and so many different types of perspectives are present. So the opportunity is there. I think if there's a shortcoming, it's not everybody seizes that opportunity. There were of -- there are plenty of situations where I was in closed-door sessions looking across the table at actors that I thought, I'm so glad we're having this conversation. I don't normally get to sit down with you and when we're at home and I'm based in D.C. But often, you're speaking to people who think and look like you, right?

Lindsey Hall: Yes, absolutely. That kind of comes back to what you and I were chatting about when you first arrived here today, you were coming from another conference. And you said that this topic of needing to break out of your silos is really important for driving meaningful change.

Amy Hepburn: Yes, honestly, in my work, it is top of mind for me right now is how do you break out these silos. It's so often to be in this echo chamber of people who think and act and look like you. And then you realize when you step out into the community, you realize there is this massive deficit of trust, as I was just referencing. And there's -- it shouldn't surprise any of us that it exists because, again, what are we doing to break down these silos and have these conversations with unlikely subjects. And in a conference I was just at, it was a separate topic that they were discussing. It was actually criminal justice reform. But he had a great quote. It was actually Van Jones. And he said this, "The energy is in the synergy for anything we're working on. The energy is and the synergy."

And it was such an aha moment for me when I heard this, even though it was on a completely separate topic to ESG that I went, that's the truth for us right now on climate, on blended finance, on -- at the ILN, we're really focused on inclusive finance and diversity and inclusion as well. It's how do we identify where the synergy is? What goals do we share in common? And then let's just build on that common energy and let's take that momentum, let's take it across our individual sectors and silos and have this conversation in an amplified way with different actors.

Lindsey Hall: Okay. So we're going to have some -- our other guests today are representatives from different parts of the industry from the asset management industry, from Deloitte. Do you have any questions that you think we should pose to them when we get them up in the hot seat? Anything that you want to hear from our fellow -- your fellow guests?

Amy Hepburn: Yes, I'm always interested in what you see as the challenges in your space. I mean I think that, again, we all have a tendency to view this work through the lens. So I'm looking at this from the lens of institutional investors and the challenges that we're facing as institutional investors, asset -- large asset owners and asset managers.

But the truth is, is that to solve the issue and to solve -- to really tackle it, we need to take an approach that takes into account data. I know that's a huge concern, that is. It also takes into account who's at the table, like we said. But then, what else? What else are we missing? And what new ideas do we need to try?

I think, as I mentioned in the beginning, creativity is a huge element to this work. So we need new thoughts. So we need new perspectives, and we need to be open to them. And I will tell you, on a note of positivity, the winds of change are here. On behalf of the institutional investors that I represent, our $10 trillion, I am telling you this interest is here. They are excited about it. They are coming to the table. They are -- they have a new energy that I didn't even see a year ago.

So yes, these are big ships, but these ships do turn, and it takes time and it takes perseverance, but it takes creativity, but you have willing leaders at the helm that are open to these ideas. So I just -- my vote of confidence to anyone listening here today is bring your creativity, bring your best thought leadership to this because the soil is ripe for new ideas.

Lindsey Hall: We're still digesting headlines from COP27, but I asked Amy, is it too soon to be looking ahead to COP28, which is scheduled to take place in Dubai in 2023?

Amy Hepburn: No, not too early. I was just in a meeting, gosh, just last week, we were just a week out of Egypt and a couple of my members said, "Hey, when are we going to get together and start making our strategy for us, for our ILN group about what we want to push for and what we want to see at COP28?" And so we're a year out.

And so I think there's going to be a heavy emphasis on real economy, decarbonization. There's -- we're going to continue to focus on transition. There's going to be increased focus on biodiversity. I think that's an area that we haven't been super active in, but I think our members are -- COP15 is in Montreal. It has a heavy emphasis on biodiversity. I think we will be watching on that.

And then I would say the third area of interest that we should keep our eye on is this intersection between diversity and climate. I think this -- those of us that have been in this space for a long time don't feel like this is new. We've been talking about intersectionality for a long time in ESG, in particular, amongst climate and diversity.

But I think it is reaching a fever pitch. And I think it's not going to just be, oh, let's make sure we check the box and give a token day to talk about diversity. I think it's going to become the through line of everything we do. And I think you saw that with the loss and damages conversation. I think you're going to see it, and I think it's time for it, honestly, for it to be seen as a much more integrated approach to climate finance more broadly.

Esther Whieldon: We also looked to the future in my conversation with Evan Harvey. First up, he talked to me about his role in the changing sustainability landscape and the challenges that Deloitte's clients are facing. Here's Evan.

Evan Harvey: I was at NASDAQ for almost 20 years as the Global Head of Sustainability, so I have a lot of experience with this in terms of capital markets integration. What are the drivers of capital-related sustainability and ESG? And then my work at Deloitte is not that different. It's working with client companies to try to figure out how they move forward, who they engage with, how do they bring stakeholders into the big tent, how do they devise a strategy, how do they learn from their materiality assessment, things like that.

Esther Whieldon: Yes. So what are you hearing from clients? What are sort of the biggest challenges for them?

Evan Harvey: What are we hearing from clients about their ESG or sustainability policy? We're hearing that there is a problem with data. It's a problem finding data, validating data and making sure that the data is put in the right form and the right format for their stakeholders to actually consume it and make decisions based on it.

There's still framework fatigue and a little bit of distress around the lack of a unified, coherent driver in the disclosure space. And so you have large companies that tend to be in the mix and being proactive, and a lot of smaller companies who are staying out and waiting for more of a direct driver to participate.

We're hearing potentially about a lack of resources. Everybody wants to do ESG and then a war breaks out of Ukraine or there is a global inflation crisis. So that tends to get in the way of some of the enthusiasm for ESG and sustainability investment.

We're also hearing from clients that they are struggling a little bit with subject matter expertise. So when we talk about ESG, especially as it gets into the area of nature and biodiversity and natural capital, that's an area that a lot of companies might feel like they bear some responsibility or have some innovative opportunities in, but they don't fully understand how or how that ties back to financial metrics.

Esther Whieldon: So we heard Amy say the winds of change is here. And I just want to hear what you have to say about that. Are you feeling the shift like her? And in what ways are you feeling it?

Evan Harvey: Clearly, the shift towards the connection between business and sustainability, especially as it refers to ESG, is present and sort of irreversible. I don't see that happening -- I don't see that changing anytime soon. I feel like there are political and other winds afoot that are trying to maybe paint the ESG movement or the sustainability movement in sort of an anti-business -- with an antibusiness brush, but I don't think that, that really will hold water over time.

And so I think that the winds of change are already here, I agree with Amy on that. I also feel like we're really not making progress near as fast as we have to. We don't have 2 or 3 generations to get this straight and to figure it out. What the market forces, which are natural and are driving investment in the right direction, it's just not as rapid or as large as we need it to be. So we're going to face some planetary and environmental threshold here pretty soon that the pace of change so far is falling short of.

Esther Whieldon: Yes. And the IPCC reports that came out in the last year and a half have certainly driven that point home.

Evan Harvey: And it's hard to balance enthusiasm and engagement with this issue with a sort of sense of pessimism around the problem that we're facing. That's why I come at this from a business angle, from a capital markets angle, working with large clients and small clients to make them all better because we're going to need every approach to sort of get close to an answer, and it's the only system globally that really is empowered to meet this challenge at scale.

We've tried it with governments. We've tried it in little ways here and there, pulling certain levers, but I think that the global business market, the capital markets are the ultimate driver of change in the space.

Esther Whieldon: Evan talked about some of the headwinds that sustainability stakeholders are facing, like the looming recession as well as some of the political landscape and the pushback in ESG in the U.S. So we asked him, how can businesses and capital market participants balance these challenges with crafting an ESG and sustainability strategy going forward?

Evan Harvey: This is advice I've given for years. Don't come at this from a public pronouncement point of view, come at this from a management excellence point of view. Use these metrics and these data points to make your internal operation more efficient and more meaningful.

So as a manager, diversify the data set that you look at in your dashboard in order to get the most out of your people, the most out of your processes, and most out of your resources. There's no reason why you should eliminate ESG from your management purview because it is really meaningful information about how the company operates, good or bad. It is also really meaningful operation -- or information around your risk profile.

So there are huge, I think, sort of gaps in understanding where the risks are related to sustainability and just managing this data in-house and actually giving it credence and I would say, exposure at the Board level, helps you to make it more real and make it part of the standard business process. Also, I mean, I think that there is a public sort of reporting part of this. There is a sort of stakeholder engagement part of this, but there are many, many other good reasons for doing ESG other than reporting.

Esther Whieldon: Sometimes, we use the terms ESG and sustainability somewhat interchangeably. So we wanted to know Evan's view on this. Is there a distinction?

Evan Harvey: It's a distinction that we make at Deloitte. It's a distinction that I make in my mind. I sometimes conflate the 2 in a short-form of conversation. To me, ESG is the data-driven discipline of investing, in particular, for environmental, social and governance goals. That is how I think of what ESG means. It is a data-driven discipline that actually is talking about unlocking levers of capital.

Sustainability, to me, is a larger sort of philosophical movement around the availability of resources, the sustainability of companies and institutions to sustain themselves and their profits and their people long into the future and the sustainability and viability of the planet.

Lindsey Hall: So we heard about COP27 from Amy, and we talked about the changing ESG and sustainability landscape with Evan. Our final guest of the day was Marina Severinovsky from Schroders. The firm will have a presence on the ground at COP15, so I started by asking her why. Why will an asset manager be taking part in a UN Conference focused on nature and biodiversity?

Marina Severinovsky: I would harken back, I think, to the other speakers, right? I think it's -- in the environment that we're in, where I think a lot of people have sort of ESG fatigue or kind of climate fatigue a little bit, I think we have to really remind that it's not some new thing we're throwing at you, like you've just gotten used to climate, let's throw nature and biodiversity. They're not just inextricably linked. I mean they're completely one and the same in a sense.

We think about kind of climate change is the problem to solve and nature is one of the sort of lanes you swim through, right, to get to the solution. We think about kind of the extent to which nature can be the resolver kind of the issue around kind of carbon capture or not putting new carbon out into the atmosphere. And so from that perspective, I think just as we've made an argument around kind of climate and understanding climate risk as being critical to our fiduciary duty as investors, I think we're in the same place in terms of saying that nature-based and that kind of biodiversity-based risk at this point, as investors, we have to be able to take that into account on behalf of our clients. Again, it's part of our fiduciary obligation.

So I think climate change, just to kind of put them together, right, is systematic -- or symptomatic, rather, of like the bigger challenge, which is basically there's an inevitable conflict between growing demand on the world's finite resources, like that's the issue. And that's when you come to sort of nature and biodiversity, right, because that's where you have some regenerative or kind of renewable resources, but you can also deplete those to the point where they sort of no longer are renewable. And then, of course, you have the ones that kind of get used up like oil and gas.

And so I think we just have to sort of establish that as a baseline. And so more than half of the world's GDP, $44 trillion rests on -- is dependent on the natural world. So this is a really kind of critical point. And so the kind of preservation and the restoring of nature can make this really a powerful contribution to efforts to mitigate climate change. So that's the link.

And then in terms of kind of where we come at this from an investment perspective, we think that it's kind of an obligation at this point, right, to sort of bring capital to bear on these issues. So we're participating in the conference to really signal our support for, first of all, the development of an ambitious sort of global biodiversity framework to include sort of mandatory disclosure and then to take part in that conversation and kind of fast-tracking action from the financial sector on nature. And we talked about how -- because we've learned some things through climate, we can bring those to bear in nature, right?

Lindsey Hall: Thank you. So I was here in New York for Climate Week back in September. And one of the conversations I was hearing a lot is this idea that financial institutions in the private sector more broadly, a lot of CEOs are kind of scratching their heads still when it comes to understanding what is biodiversity and why does this impact me, why is this something I have to think about for my business. That's what I'm hearing anecdotally, but I would love to kind of test that with you. What are you hearing? What are clients saying about nature of biodiversity?

Marina Severinovsky: Again, I think it's the same thing. I mean we -- so I focus on North America and so we do distinguish between kind of the U.S. and Canada. And so it's helpfully the -- right that we're in Montreal, and we have a number of Canadian clients and prospects there. And so we can have some more robust conversations because we started those conversations earlier in the year around kind of nature, biodiversity investment, again, risk, what we're trying to achieve.

I think in the U.S., it's much more nascent even among sort of sophisticated clients where you're kind of bringing that conversation. Again, you don't want it to be kind of a brand-new topic, you want it to be a connected topic. It's to say we've been talking to you about, let's say, your net zero commitment that you've made or you're about to make, right? So kind of certain of our either kind of public pension clients or kind of on the corporate side. We've always been here to sort of assist, right? We've made our own climate commitment. We have a transition plan. And so we're kind of able to look at where folks are working their plans and give sort of counsel and advice. So nature has to become a part of that, right?

So you have a transition plan. What part of that component is going to be sort of nature-positive investment. If we think about kind of a normal curve, right, for investors, there's kind of divestment, which for kind of diversified investing, you kind of have to keep to a minimum. And then there's engagement, which is the kind of big bulk in the middle, right? It's engaging with our investee companies and around every topic but sort of including nature.

And then this kind of nature-positive and climate-positive investment, that -- which is what we're on the search for. And the creation of products that allow people to sort of monetize that is really critically important. And so again, we try to kind of put that together as almost a natural extension or a continuation of the conversation we've been having with clients for the last couple of years as they've wrapped their heads around sort of the net zero ambition.

Lindsey Hall: I wanted to ask, you're our third speaker today, anything that stood out to you, surprised you, any vehement disagreement with anything you heard from your fellow guests today?

Marina Severinovsky: Certainly not disagreement. But what I think, for me, resonates -- kind of bringing a lot of this together, we also had folks who were at COP27, in some cases, had some -- I mean, we had one person who said it felt chaotic and dystopian, the loss and damage, right? That deal was sort of done last minute, right, kind of down to the wire.

And then there was that kind of loss of trust, and really that word -- sort of trust. You have very Africanflavored COP, right, kind of emerging markets-flavored COP. There's this sort of tension between the developed markets that had committed to $100 million of sort of monies in the past to offsetting the kind of impacts of climate change in emerging markets, hadn't delivered that money. There's one of our colleagues who basically heard kind of an African, right, kind of government official say, "We're not beggars, right? We're just asking for kind of what is due." And so that kind of tension, that erosion of trust, I think, is very real.

And I think this is the year that a lot of the kind of human or social -- like the people came to the fore. And I think that will be true at COP15, too. And I think it's true with what we're seeing in the U.S. in terms of the backlash against ESG.

Another word that really resonated for one of our colleagues was sort of respect. People just asking to be respected, their priorities, their views. And so whether that's kind of -- she went like the young people's pavilion. She went to the kind of indigenous populations. By the way, indigenous population is to bring it back to sort of -- to nature are basically stewards of about 80% of the world's remaining biodiversity, right? And so thinking about how we support those populations.

But if we're going to talk about respect and empathy, then we have to accord that same respect in empathy to everyone, right? It's not a pick and choose. And so for example, again, the backlash from the U.S. is frustrating because some of it's very politicized. But a lot of the underlying concerns for folks who work in certain industries, right, communities and workers who are dependent, let's say, on fossil fuels, even here in a very sort of rich country and a very developed market, those are real concerns, too, for them and their families.

And so thinking about how we build bridges, how we sort of not lose people, which I think is a lot of what we've seen this year, is really important. It's kind of bringing people back into the conversation, and remembering that all of this ultimately comes down to people. If we're preserving the planet, it's for the people, right?

Lindsey Hall: If I could pose a sort of similar question to what I posed to Evan at the end there, how are Schroders approaching its sustainability strategy heading into 2023 in light of some of those headwinds you just talked about?

Marina Severinovsky: Yes. So I think we -- I've sort of said to -- again, I -- we work for a U.K.-based firm and a lot of our sort of clientele is obviously European and the mindset is really different. And they've been watching with some -- like some level of -- I mean, real concern, right, kind of what's been going on in the U.S. and sort of the bifurcation here. And I've sort of said, "We have to get comfortable with being uncomfortable probably for a longer period of time."

If you ask me about kind of 2023, as I'm saying to Lindsey, it's not like someone's going to ring a bell on like January 1 and all the sort of headwinds that we've been seeing this year are going to go away all of a sudden. I think we were lucky for a number of years because there was an emphasis on climate mitigation, right? You had a lot of additional kind of companies and governments make commitments. Investors became very interested in sustainability.

But if you think about kind of the -- what correlated with that, right, it's the performance of sort of large cap growth companies that tend to score well on ESG metrics, but it's because they're large tech or kind of consumer comms companies that don't have a very big -- especially as kind of Scope 2 or Scope 3 footprint, they have very highly paid employees who are not sort of in danger from a health and safety perspective. They have a lot of staff that can write great sort of governance policies and fill out questionnaires.

And so there was a correlation, I think, especially on the passive ESG side of kind of ESG is doing really well, but like what does that mean, ESG, right? It's a certain kind of company baseline. And now we're in a situation where you've got kind of energy prices, obviously kind of higher. You have the kind of RussiaUkraine conflict. I was born in Kiev, so it's very kind of personal to me, obviously. Those things aren't going away.

I think, obviously, inflation, interest rates, I mean, we're just in a different environment. So I think what it means is that, again, we had a couple of great years, but we have to be able to live through all kinds of years. And so having resilience or having durability to the sustainability story, right? And not just for institutional investors.

But Schroders has an arm through our Hartford partnership with retail investors, too, and so you have to be able to talk to those folks as well. I had spent years, actually, through our Hartford partnership, working with the Midwest. So kind of 15 states from kind of Michigan and Illinois, Iowa, Indiana, down to Texas and Oklahoma, and so I spent years talking about sustainability in those markets, again, to institutional investors, wealth investors and kind of really rank and file retail as well.

You always have to be able to bring it back to something that is understandable, like risk in a portfolio, opportunity. And so having this kind of more robust or more durable, more resilient understanding of what ESG means, as I think we talked about, kind of a lens or a prism through which we understand all different kinds of risks.

At the height of, I guess, early this year, when the Ukraine and Russia conflict began, I was asked the question on the podcast where people said, "Can -- I mean, can we even think about sustainability at a time like this? We've got sort of Russia, Ukraine. You've got the kind of COVID ascended again in China, right?" Kind of like today, right, the sort of zero-COVID policy. "All these things are going on, how can -- do we even have time to think about sustainability?"

And I said, "But all of those things are about sustainability, right?" The kind of geopolitical component, health and wellness, I mean, line it up, like all these things. So it's not something that you kind of set aside and put in a corner. It's again, it's this prism, this lens to which you understand the whole world. And that's, I think, again, how we have to sort of build it in, so investors understand it better.

And that's on us, too. I think as an industry, even the question of ESG, versus sustainable, versus impact, if the backlash consists of folks who are saying, "This is concessionary," or "You're going to take something away from our pensioners, right, our kind of beneficiaries," part of the ability to make that argument is that there was a vacuum, right, in explaining what is what, why you do what you do, such that somebody came and filled that vacuum with a negative message, right?

So that's -- again, that's lesson learned, right? If in recent years, things have been easier, now things are a bit harder, which means we have to work a little harder to kind of get the story out. And we learned that lesson for the next cycle because it will come again, right, where there's going to be skepticism.

Lindsey Hall: Some of what you're saying is kind of reminding me of what we heard earlier from Amy about the need to not think about diversity issues and issues of a just transition as some separate bonus issue, like they're all kind of woven together. I think if I had to create -- identify a through line of today's conversations, it would be this sort of interwovenness of these topics.

Marina Severinovsky: Absolutely. Like I said, I think this is the year that's sort of the human component of climate, for example, or nature, whatever, sort of comes to the fore. And I think this is the year that we just start to think about climate justice and just transition and not start to think about it. Obviously, it's been topical, but where I think it's front and center, the kind of why is the people.

And we know where we need to go because even the difference between a 1.5-degree trajectory and a 2-degree trajectory has tremendous difference, right? It's tremendous -- a lot sort of more potential damage and kind of physical risk and all those sort of things. So we know from that perspective that you have to be able to bring everybody with you. And the way you do that, I think, is, again, with sort of respect and empathy to their priorities and talking directly to them.

Again, a lot of times, we're in the room with people who just agree with us. As you said, right, we're all there. And I actually heard at the conferences before where they're like the out there or the other, and I go, don't do that because it will come back to bite and that it has.

And I think part of that you see from the global south, that kind of tension between developed and emerging markets. Part of that is here and kind of politicization in the U.S. We're going into winter. And if it's a very cold winter in Europe, right, you have an energy crisis and there's consequences there, too. So this is all over the world.

And I think part of it is, again, just those of us who have been on the leading end just need to make sure that we are telling a better story, I guess, right, and that we're making a more empathetic connection to folks for whom change is hard. I mean transition is challenging and scary and it's necessary and so how do we -- again, how do we kind of hold the hand better, how do we empathize better even as we go with urgency where we need to go.

Lindsey Hall: So Esther, there was a lot to unpack in those 3 interviews. One thing that really stood out to me was the word choices. We heard Amy talking about the role of trust and bringing together different actors to achieve climate goals. And the way I heard Marina talking about the importance of respect. Trust and respect, these 2 very human topics that, honestly, I haven't previously heard highlighted in a business or financial setting like this. This idea that we need to be able to communicate clearly and across silos is just so critical heading into 2023.

Esther Whieldon: Yes. And it was also striking to hear Marina to talk about how we can't put sustainability in a corner as some kind of separate optional topic. All the headwinds that companies and investors are weighing heading into next year, the Ukraine-Russia war, COVID-19, things like that fit squarely under the sustainability umbrellas, she said.

And at the same time, we heard Evan say that despite these headwinds, the connection between sustainability and its value to business remains clear. And we heard how the private sector is getting to grips with nature. This is a topic that we'll be covering a lot, Lindsey, on the ground at COP15 and going forward. So please stay tuned for upcoming episodes.

Lindsey Hall: Thanks so much for listening to this episode of ESG Insider and a special thanks to our producer, Kyle Cangialosi. Please be sure to subscribe to our podcast and sign up for our weekly newsletter, ESG Insider. See you next time.

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