Skip to main content

The Disclosure Regulation and wider ESG regulatory developments in the EU

Alerts and newsletters | April 20, 2020

As climate change and Environmental, Social and Governance (ESG) considerations become increasingly important to investors, they are also rising on the priority list of European legislators. In March 2018, the European Commission (the Commission) adopted an action plan on sustainable finance to support the EU’s climate and sustainable development agenda by encouraging the integration of ESG factors into firms’ decision-making and thereby facilitating the mobilisation of capital to finance sustainable activities. This document proposed a multi-limbed, EU-wide strategy on sustainable finance and set out a roadmap for further work, focussing in particular on:
  • Clarifying the duty of asset managers and institutional investors to take sustainability into account in the investment process and enhance disclosure requirements (see Disclosure Regulation below)
  • Establishing a unified classification system/taxonomy to define what is sustainable and identify areas where sustainable investment can make the biggest impact (see Taxonomy Regulation below)
  • Creating EU labels for green financial products on the basis of this EU classification system
  • Requiring insurance and investment firms to advise clients on the basis of their preferences on sustainability, and fund managers to incorporate ESG considerations into their decision-making

Additional information

icon View File

This communication is for general information only. It is not intended, nor should it be relied upon, as legal advice. In some jurisdictions, this may be considered attorney advertising. Please refer to the firm’s data policy page for further information.