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According to the FCA, the new rules come as investors increasingly seek investments with positive environmental and social impact, with global AUM in ESG-oriented funds anticipated to grow to $36 trillion by 2026, while around 70% of investors report lacking trust in the sustainability claims of investment products.
The FCAs SDR requirements were introduced by the regulator in November 2023 , aimed at helping investors assess the sustainability attributes of investment products, and to avoid greenwashing risk, to portfolio managers. billion sustainableinvestment mandate by UK wealth manager St.
It includes financial operators and other organizations interested in the environmental and social impact of investments. The focus on sustainability has greatly increased in recent years, and ambitious climate and environmental goals have been set at European and international levels. How high is the risk of greenwashing?
A clear sustainability business case should also be well articulated and understood by the board, management team, and employees as well as external audiences such as investors and customers. executives say their organization is increasingly focused on socialsustainability. For example, the research cites, Verizon, a U.S.
Protected status for ESG investment products could mark the beginning of the end for greenwashing for UK investors. Before long, any asset manager thinking of slapping a ‘sustainable’ or ‘ESG’ label on its investment products for UK clients should think twice – at least. It thinks there is a problem about greenwashing.”.
The group’s latest report, “ A world in balance 2024:Accelerating sustainability amidst geopolitical challenges ” tracks advancements in organisations’ environmental and socialsustainability over the last three years.
The FCA’s SDR requirements were introduced by the regulator in November 2023 , aimed at helping investors assess the sustainability attributes of investment products, and to avoid greenwashing risk, to portfolio managers.
Sustainableinvestment experts predicted an even greater emphasis by investors on public policy, at a recent roundtable held by S&P Global Sustainable1 and ESG Investor. First, our roundtable participants surveyed the existing regulatory landscape for sustainableinvesting. Positive trajectory.
Gradual greening – At the risk of overplaying its second-mover advantage, the UK’s Financial Conduct Authority finally unveiled its sustainable fund labelling regime and proposed anti-greenwashing rules , after multiple delays.
Until the European Commission clarifies its definition of ‘sustainableinvestment’ under the Sustainable Finance Disclosure Regulation (SFDR) , asset managers will continue to exercise caution in their compliance with disclosure requirements for Article 9-labelled funds, including resorting to increased reclassifications. .
Efficient, reliable and trusted benchmarks can cut the cost of sustainableinvestment, as they allow passive, index-based strategies to support sustainableinvestment objectives. Passive funds, she said, account for roughly 40% of all US sustainableinvestment assets under management.
The Commission has finally given us clarity on the general orientation of the RTSs,” says Victor van Hoorn , Executive Director of the European SustainableInvestment Forum (Eurosif). . He adds that instruments for which sustainability data is “lacking” will not be accepted as Article 9 products. .
Richard Hardyment, Head of Engagement at the Institute of Business Ethics, calls for a revolution in the mechanics of measurement to realise sustainable finance’s potential. There are accusations of greenwashing from one side, ‘wokeism’ from another, and a lingering question on everyone’s lips: is it making a difference?
Fiduciary duty is driving the growth of sustainableinvesting in the US. In early November, with both COP27 and the US midterm elections looming, a group of sustainableinvestment experts joined ESG Investor in New York to consider the evolving US regulatory landscape for sustainableinvesting.
International investment manager M&G Investments announced that it will adopt the new Sustainability Improvers label introduced by the UK Financial Conduct Authority (FCA)s Sustainability Disclosure Requirements (SDR)for its Sustain Paris Aligned range of climate mitigation-focused investment funds.
The FCAs SDR requirements were introduced by the regulator in November 2023 , aimed at helping investors assess the sustainability attributes of investment products, and to avoid greenwashing risk, to portfolio managers.
Kenneth Lamont, Senior Researcher at data and analytics firm Morningstar, acknowledges EUGBS is another milestone on the road towards the formalisation of sustainableinvesting in Europe. While the intention of the EUGBS is to improve standards and reduce the risk of greenwashing is admirable, the reality is its limited scope, he adds.
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