The development of the European ESG CLO market is well under way. Industry-based ESG screening is fast becoming the norm for new deals, and the bar for ESG incorporation is continuously being raised, helped by market innovations and regulatory initiatives. A number of technical, commercial and legal challenges must be overcome if the pace of growth is to be maintained, and some of these challenges may require cooperation at an industry level. However, the forces driving the growth of ESG CLOs are strong, and it seems reasonable to conclude that this is a trend that will continue into the near and medium term.