In addition to avoiding "greenwashing", the EU hopes with this regulation to boost sustainable investments Asset managers, pension funds, insurers or investment advisors in the European Union (EU) will be obliged to report how they assess the environmental and social sustainability of their products. And when they claim to have a green strategy, to justify it. This is required by the regulation on sustainability disclosure in financial services that came into force on Wednesday and seeks to prevent so-called “greenwashing”, whereby investments not actually climate-friendly are labeled as “green”. The regulation harmonises the way in which institutional investors, such as asset managers or insurers, must account for how they incorporate sustainability considerations into their activities. In particular, it requires them to report on the procedures they use to integrate environmental and social risks into their investment and advisory process and how these risks may affect investment performance. Also, when these companies claim to implement a green strategy , they will have to provide information on how they carry it out and on the sustainability or climate impacts of their products or investment portfolios. “This increased transparency will raise awareness of the sustainability credentials of financial products. While there is […]

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