Regulators in region moving at vastly different paces on sustainability issues
26 Apr 2021 |
Tom King
Europe’s new rules requiring fund managers to assess and disclose the environmental, social and governance (ESG) details of financial products took effect last month. The new statutes are intended to make it easier for investors to better comprehend how ESG and sustainability feature in their investments, while increasing transparency.
A key component of the Sustainable Finance Disclosure Regulation (SFDR) is to make it harder for issuers of investment products that have sustainable investment objectives to “over-articulate” their ESG credentials.
The directives have also been crafted to suppress the risk of greenwashing by participants in financial markets, or when a company devotes more time and money on promoting itself as environmentally responsible, rather than actually reducing its environmental impact.
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