Over the next two years a number of regulations on sustainable finance will come into effect, emerging from the EU Green Deal. These will directly affect asset managers, insurers and pension funds at both a product level and a reporting level. It is therefore important that marketers in the space have a clear understanding on what’s coming down the line:
EU Disclosure Regulation – March 2021
This regulation will require advisers to provide investors with pre-contractual ESG-related information on specific products. The objective is to enable investors to make their investment decisions on the basis of ESG considerations as well as traditional financial analysis.
Read more here.
MiFID II and the Insurance Distribution Directive (IDD) – 2021
Both amendments are designed to integrate sustainability risks and factors into the investment process, and require advisers to take account of clients’ ESG preferences during the advisory process, at both the customer profiling and product selection stages.
EU Taxonomy – January 2022
This regulation aims to introduce an EU-wide classification system for ESG-related investments. The taxonomy will “create the world’s first-ever “green list” – a classification system for sustainable economic activities – that will create a common language that investors can use everywhere when investing in projects and economic activities that have a substantial positive impact on the climate and the environment“.
Read more here.
With the UK set to leave the EU at the end of 2020, there is of course some uncertainty about how the above will be implemented into UK law. We can, however, be certain that a version of this legislation, with similar objectives, will be coming our way.