According to a survey of more than 300 hedge fund managers and investors, a majority of hedge fund managers are incorporating environmental, social and governance (ESG) factors into their investment processes, partly driven by investor demand. Those managers, however, face a number of challenges, including a variety of impediments to the creation of ESG products. The International Organization of Securities Commissions (IOSCO) recently released a consultation report, which examines those challenges. This second article in a two-part series explores investor education, impediments to the development of sustainable products and IOSCO’s recommendations and requests for input. The first article outlined the risk of greenwashing and the various regulatory approaches to sustainability-related practices and disclosures. For more on the aforementioned survey, see “Manager and Investor Interest in ESG Is Growing, According to Recent Global Hedge Fund Study (Part Two of Two)” (May 20, 2021).