15 December 2020

Sustainable finance update

We take a look at some of the latest development in sustainable finance.

  1. $9 Trillion AMs launch Net Zero initiative

Last Friday, 30 global investment firms with over USD 9 trillion of assets under management announced the launch of their Net Zero Asset Managers initiative.

Their press release outlines a commitment to support the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5°C.

There is an interim target set for 2030, i.e. for assets to be managed in line with the net zero goal, consistent with a fair share of the 50% global reduction in CO2 (as identified in the report from the Intergovernmental Panel on Climate Change [IPCC].

This will be reviewed  ‘at least every five years, with a view to ratcheting up the proportion of AUM covered until 100% of assets are included.’

In the meantime, they pledge to work in collaboration with clients and encourage other asset managers to ‘join their initiative, to demonstrate sector leadership and commitment to sustainable future’.


  1. Smaller firms “steal march” on sustainable investing

FT Ignites (c/o Morningstar) has reported recent sustainability findings of actively managed equity funds.

The analysis appears to highlight a trend that those firms with the most developed sustainable capabilities have a previous reputation in catering to client demand for investments that include environmental, social and governance (ESG) factors.


  1. EC launch proposal for ESG “Data Hub”/ EU single access point

On 3 December, the EC launched an initiative to establish a single EU access point for companies’ financial and non-financial information (ESAP).  Constructed around the current regulatory filing systems at national level, this will include data on sustainable finance (“ESG data hub”).   Following the previous European financial transparency gateway (EFTG) project, ESAP will include web portals to give investors quick and easy access (“without undue burden on companies”). Some data will be available in machine-readable format, helping users search and compare data more easily.

With the EC set to publish an inception impact assessment and activate a consultation process, they are expected to formally adopt ESAP in Q3 2021.


  1. CBI: provide a fast-track process for SFDR prospectus updates

Finally, following the recent CSSF announcement, the Central Bank of Ireland has advised local fund firms that it (too) will enable a fast-track process to administer prospectus updates due for filing under the EU Sustainable Finance Disclosure Regulation (SFDR) by 10 March 2021 (“level 1” obligations).

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