EU sustainable finance proposals for asset managers and advisers
Earlier this year, the European Commission published a package of legislative proposals on sustainable finance, which are aimed at firms involved in investment decision-making processes and firms providing investment advice.
- integration of ESG factors and risks in the legal duties firms owe to investors and/or clients;
- formal obligations to disclose how sustainability risks are integrated into their organisations and the services provided to clients;
- where firms market themselves as pursuing a low carbon emission objective, they may need to designate and comply with methodologies for “low carbon” or “positive carbon impact” benchmarks; and
- firms may also need to capture and reflect clients’ ESG preferences where suitability assessments are required under MiFID II.