The EU has set in motion an ambitious legislative programme to make environmental, social and governance (“ESG”) concerns a central plank of regulation in the financial services industry.
Responding to the need to move towards a global sustainable development framework, in March 2018, the European Commission (the “Commission”) published an Action Plan on Financing Sustainable Growth (the “Action Plan”). One of the Action Plan’s core tenets is a belief that financial services firms, particularly those which invest on behalf of clients, can play a key role in the transition to a low-carbon and more sustainable economy.
The Action Plan identifies ten key action points which seek to fulfil this goal in respect of financial services, including:
Various initiatives are also targeted at corporate issuers.
This note focuses on the elements of the ESG initiative relevant to asset managers and financial advisers.