Читать книгу ESG Investing For Dummies - Brendan Bradley - Страница 25

In Europe, the EU Commission has introduced new disclosure requirements related to sustainable investments. The Sustainable Finance Disclosure Regulation (SFDR) requires all financial market participants in the EU to disclose on ESG issues, with additional requirements for products that promote ESG characteristics or that have sustainable investment objectives. This regulation aims to limit the risk of greenwashing by financial market participants while increasing transparency, which allows investors to better understand how ESG and sustainability influence their investments.

Parallel to this, the EU Commission has also introduced the Taxonomy Regulation, which establishes an EU-wide taxonomy (akin to a dictionary) of economic activities that can be viewed as environmentally sustainable, using reference to six environmental objectives. This will enable investors and clients to identify environmentally sustainable investments, while bringing greater clarity for asset managers.

The regulation was implemented around three pillars: the elimination of greenwashing (see Chapter 6), regulatory neutrality, and a level playing field for all investors. Added to this, the EU Commission has agreed to introduce new standards on climate change through the launch of two climate benchmarks: the EU Climate Transition benchmark and the EU Paris-aligned benchmark. The regulatory environment is clearly driving institutional investors toward a substantial change in ESG practices, but that might help them get ahead of regulation or mandatory reporting in other jurisdictions.