ESG revolution and the new era of green regulation

Change is coming. The total value of assets under management in ESG funds (environmental, social and governance) has grown at a compound annual rate of more than 70% over the past five years. The broad market for sustainable investing has witnessed a further surge in 2019 and shows no sign of abating: investment flows into US open-end and exchange-traded sustainable funds surpassed $4bn for the third quarter in a row.
These trends are also bringing about regulatory change. In Europe, Mr Robert Ophèle the chairman of the French financial regulator, the AMF, has just last week urged the EU to move faster on setting common standards for ESG investing to prevent widespread “greenwashing”. The European Commission is already on the case. In 2016 it established a high-level expert group on sustainable finance. Its recommendations form the basis of an action plan on sustainable finance, which was adopted by the Commission in March 2018 and which sets out a comprehensive strategy to further connect finance with sustainability.
To find out more information about ESG funds and the European Commission’s action plan on sustainable finance, including future regulatory changes, please click here.

If you are interested in understanding how future sustainable finance regulations might impact your business or would like advice on how to prepare for the future, please do not hesitate to contact one of our Investment Services lawyers.