Sustainable investing around the world is governed by an alphabet soup of regulations. Here is what UK investors need to know.
Governments and their financial watchdogs have accelerated their efforts in ESG finance in recent years, rolling out a dizzying array of rules and regulations. This has created a kaleidoscope of policies, differing vastly by geography and jurisdiction.
ESG issues were first mentioned in the 2006 UN Principles for Responsible Investment (PRI) report, requiring the criteria to be incorporated in the financial evaluations of companies. But the regulatory output has truly ramped up over the past two years, as policymakers and officials work to ensure providers meet the necessary criteria.
Emma Russell is head of the finance practice group at the international corporate law firm Haynes and Boone. She comments that, while UK investors are already feeling the effects of global ESG regulations coming into force this year, this is just the beginning. They should also be well prepared for ESG regulation to impact activity even more significantly going forward.
“The SFDR – in particular – will require close attention from UK investors, as it sets out prescriptive standards to report against,” she says.
“The new regulations will mean that ESG investing should touch increasing pockets of the market.”
Excerpted from Raconteur. To read more, click here. (Registration required to view the report.)