An age of sustainability is supplanting the 200-year-long era of carbon. The financial services industry, partly by choice and partly by regulatory edict, is helping to facilitate the transition.
The EU, for example, wants palpable action on climate change. It is determined to secure net-zero carbon emissions by 2050, as well as outlaw greenwashing. In pursuit of these policy objectives, it has established the Sustainable Finance Disclosure Regulation (SFDR).
According to the EU, SFDR ‘lays down sustainability disclosure obligations for manufacturers of financial products and financial advisers toward end-investors.’ The EU officially adopted SFDR in 2019, with Level 1 disclosures becoming mandatory in March 2021.
Beyond SFDR, there is also Markets in Financial Instruments Directive (MiFID) II and its three pillars: EU Taxonomy, Sustainable Investments & Principal Adverse Sustainable Impact (PASI) and Corporate Sustainability Reporting Directive (CSRD).
The resources and videos below answer the key questions about the main sustainable finance regulations impacting our industry and describe BNP Paribas Asset Management’s approach to them.
ESG = Environmental, Social and Governance
- Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This material does not constitute investment advice.
- Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).