The Impact of ESG on Asset Management and Funds

Institutional capital is essential for the world to address the most pressing ESG challenges, and the need for capital is being matched by a shift in investor preference, both institutional and retail, towards investments that consider non-financial impacts as well as financial returns. Recent EU regulatory developments, such as the introduction of the Sustainable Finance Disclosure Regulation (“SFDR”) and the EU taxonomy for sustainable investments (the “Taxonomy Regulation”), signal the transition of ESG investment from voluntary initiatives to binding legal obligations, and seek to achieve increased transparency and a common understanding of what constitutes a ‘green investment’, all of which will further accelerate the shift towards investments which contribute to EU and global ESG objectives.

Iain Ferguson and Morgan Dunne explored not only the challenges that the asset management industry is facing in this space, but also the opportunities that exist for asset managers and funds seeking to proactively embrace SFDR and the Taxonomy Regulation.