Having a broad, deep and multi-disciplinary understanding of the span of demanding and fast-paced regulatory reforms, we advise many buy-side, sell-side firms and corporates on the way in which the new EU Sustainable Finance Regulation requirements will impact their institutions and on the compliance programmes and disclosures necessary to achieve compliance at both entity and product level.
The focus on this regime is particularly strong for the asset management sector and investment funds given the extensive disclosure requirements that will change its approach to ESG from March 2021. We are advising several large asset managers and investment funds on how to comply with the new requirements. Closely watching the development of detailed, technical standards in this space, and with strong links to many industry associations, we are able to provide rigorous legal analysis of the complex package of legislation, rules and policy guidance with the ability to benchmark their practical implementation in the market.
As with every major area of regulatory reform, governance and control to embed it within an institution will be a core concern of the regulators. With an eye on the Commission’s Sustainable Finance Strategy, and our understanding of our clients’ existing organisational framework and governance structures, we are able to advise senior management teams on how responsibility for ESG risks and opportunities should be mapped, managed and harnessed across the institution.
There are also significant opportunities for well designed financial products that satisfy the EU Taxonomy, and we have advised clients on a number of “Taxonomy-eligible” funds to date.
As investees, companies will be on the receiving end of ESG information requests from asset managers and funds impacted by the Sustainable Finance regime and from data analytics providers and ratings agencies. They will face increased scrutiny of this information, and ultimately they may find their ESG performances affects how they access finance. Listed companies will also be more directly affected by changes to the Non-Financial Reporting Directive, the Financial Conduct Authority’s consultation on whether to introduce mandatory climate risk reporting from 2022 and the impact of the EU’s Green Deal.