Clarifying institutional investors’ and asset managers’ duties
On March 7th 2019, EU policy makers achieved political agreement on investor disclosures requiring ESG integration. The new regulation explains how EU financial market participants must integrate environmental, social or governance (ESG) risks and opportunities in their processes, as part of their fiduciary duty and also how they should keep beneficiaries informed. Its scope includes private and occupational pension funds, insurance funds, portfolio management and investment advisors. Read the press release here.
On May 24th 2018, the European Commission released its first legislative package under its March Action Plan for Financing Sustainable Growth, the first step towards putting its sustainable finance strategy into law.
This followed the EU High-Level Expert Group (HLEG) final report released in January 2018. A high-level conference at the end of March 2018 confirmed the support and commitment of public and private EU leaders.
One of the three proposals is aimed at:
The European Parliament and Council will review the proposals before the final texts are agreed upon, which is expected in early 2019 and Member States then have two-years to implement.
The project team continues to engage with the European Commission and Parliament to support the implementation of this proposed legislation.
On May 24th 2018, the European Commission released its first legislative package under its March Action Plan for Financing Sustainable Growth, the first step towards putting its sustainable finance strategy into law.
This followed the EU High-Level Expert Group (HLEG) final report released in January 2018. A high-level conference at the end of March 2018 confirmed the support and commitment of public and private EU leaders.
One of the three proposals is aimed at:
- codifying ESG integration requirements into investor duties,
- improving disclosure requirements on how institutional investors integrate environmental, social and governance (ESG) factors in their risk processes.
The European Parliament and Council will review the proposals before the final texts are agreed upon, which is expected in early 2019 and Member States then have two-years to implement.
The project team continues to engage with the European Commission and Parliament to support the implementation of this proposed legislation.
Recommendations
The EU should accept the proposed legislation on the duties of institutional investors and asset managers regarding sustainability and fully implement the Commission’s action plan for sustainable finance.