I previously argued that artificial intelligence is not primarily a tooling problem for asset managers, but an operating model problem. The significance of AI lies in its impact on how organisations learn, scale decisions, and embed responsibility.

This article is the first in a short series on AI and operating models in asset management. It sets the context for the current AI wave and examines its implications for the industry. The second article will address data and AI strategy, while the final article will examine implementation from the perspective of an incumbent asset manager.

Europe’s journey with ESG (Environmental, Social, and Governance) investing has been nothing short of transformative. In the early 2020s, a wave of sustainable finance swept the continent, with investors, institutions and policymakers rallying behind ambitious net-zero targets, climate-focused funds booming and regulatory frameworks like the EU’s Sustainable Finance Disclosure Regulation (SFDR) setting the pace for global markets. But the landscape is shifting. Initial exuberance is giving way to a more pragmatic approach. Nonetheless, in the face of intensifying pressures such as climate shocks, the integration of ESG considerations into investment decision making has become all the more pressing, in order to manage risks and maintain competitiveness and future-readiness.