European ESG Disclosure Requirements for Asset Managers

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by Kirsten Lapham, Michael Singh, Amar Unadkat, John Verwey

A new European regime on sustainability-related disclosures in the financial sector will come into force from March 2021, after first being announced in 2018 during the European Commission’s Action Plan on Sustainable Finance.

The new rules are drafted to have a wide scope and will impose environmental, social and corporate governance (“ESG”) requirements for a wide range of “financial services participants”, including investment firms and fund managers which will include non-EU fund managers such as US fund managers, that market funds in the European Economic Area (“EEA”) under the national private placement regime (“NPPR”).

The new regulatory framework is intended to drive sustainability in an effort to make EU financial markets more sustainable. The two key aspects are the EU Taxonomy Regulation (2018/0178 (COD)) and the Regulation on Disclosures (EU/2019/2088) – (referred to as the “Disclosure Regulation” or the “SFDR”).

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