Operator: And now we have a question from Alexander Hess from JPMorgan. Alexander, please go ahead.
Alexander Hess: Yes, hi everybody. I’d like to step back and maybe look at the firm-wide ESG and climate run rate growth, which remained pretty resilient despite the U.S. political headlines and then maybe in Europe, some of the SFTR implementation noise. I wanted to know maybe stepping back high level, what do you see sort of as the big opportunities, the big sort of regulatory and market tailwinds and headwinds as well and how we should think about maybe ESG and climate’s ability to grow over the next few years?
Henry Fernandez: So let me provide some quick comments and then pass it on to Baer. First of all, as I said in my prepared remarks, there is a lot of political football here going on, on ESG. And eventually, we’ll get to climate as well. And – but the first point is our ESG business has nothing to do with political ideology of political philosophies. Our ESG business totally grounded on the fact that ESG or nonfinancial risks are material investment risks and material financial risks in a company, things that we’re – right now. corporate governance, right? The governance of the company and the auditors and all of that and $60-plus-billion market cap now because nobody tells you that’s political and that’s not investment risk.
Then I don’t know what it is investment risk. So that is very clear what we’re doing. And therefore, we don’t know of any single client in the world that at least we haven’t heard of that they’re not looking to integrate this nonfinancial risk environment in governance and social issues into their investment processes. And we are the preferred provider of tools to them. Secondly, clearly, there is a lot of regulations around the world, and a lot of our clients are trying to figure out how do they respond to that regulation, especially in Europe by far but also in the U.S. with the SEC proposals. So there is a little bit of a pause by clients and certain purchaser as to – because they’re trying to determine what are the right sets of data and tools and risk that they need to do to incorporate into their products.
So that’s been a little bit of the blip that you see in the sales, much less so the political component. But Baer, anything else on this?
Baer Pettit: I think you’ve covered it well, Henry. I think the only other element is clearly the – you mentioned the regulatory element on our clients, which has been notably a complex one for funds in Europe and the EU. So that is something that we’re very focused on, on working with our clients on. Equally, there will doubtless be an increase of regulation on the providers of data information ratings of ESG clearly which would include us. And I think in that instance, we don’t view that as something which is a particular risk to the business. We believe that we run a very high-quality business that we’ve been structured with a view that, as an index, some form of further regulation could come to us. And as a reminder, our legal entity in the U.S. that issued ESG ratings is already a registered investment adviser, and we’re confident about the way that, that is run and I’m actually getting contact with regulators related to that.
So I think overall, it’s clearly an environment which is very noisy and complex from a number of grounds, but that doesn’t, in any way, compromise the scale of the opportunity which remains very real. And in many regards, precisely this regulatory complexity is something which we believe we can benefit from as a provider of high-quality data and adjacent research.
