The asset management industry recognises the much-needed adoption of mandatory European sustainability reporting standards under the Corporate Sustainability Reporting Directive (CSRD) proposal. Insufficient availability of meaningful, comparable, reliable, and public Environmental, Social and Governance (ESG) data is a key impediment to realising the full potential of the EU's sustainable finance regulatory framework. Financial market participants' sustainable investments need to be driven by real, verifiable and reported ESG metrics of company's activities and financial risks.
The asset management industry plays a key role in meeting the objectives of the European Green Deal to make the EU’s economy sustainable. Our members integrate ESG considerations across their risk management processes and investment decisions. They develop sustainable investment products and foster transparency to fight greenwashing. This increases choice, trust and, in turn, retail investors’ participation. Overall, such efforts mobilise capital towards a fair and just transition to a climate-neutral economy by 2050.
EFAMA actively contributes to the development and implementation of EU’s sustainable finance initiatives. Among them are a comprehensive transparency framework for financial market participants, standards and labels for green financial products, classification of green economic activities and policies enhancing corporate sustainability reporting.
Given the increasingly important role ESG ratings and data products providers play in investment processes, EFAMA welcomes the increased attention of regulators to this issue. In light of the growing regulatory scrutiny on the ESG characteristics of potential investments, improving the usability and reliability of the ESG ratings and data products is a key priority for the European asset management industry.
EFAMA responded to a public consultation of the Platform on Sustainable Finance on a social taxonomy.
EFAMA welcomes the opportunity to respond to the EC’s targeted consultation on the functioning of the ESG rating market in the EU and on the consideration of ESG factors in credit ratings. Please note that our response covers, at the same time, ESG ratings and ESG data providers, as the demand for ESG “raw” data has been increasing at a steady pace. The use of ESG data has also rapidly shifted from a narrow set of investment products to being prolific across all investment products.
EFAMA released today a new issue of its Market Insights series titled ‘Sustainable UCITS Bond Funds for a Better Future'. This report highlights the strong demand for UCITS bond funds that apply ESG strategies in their portfolio selection, confirming the growing interest of investors for ESG products. It analyses the investment characteristics of this type of funds and compares their performance and fees with those of traditional bond funds.
The European ESG Template (EET) is meant to facilitate the necessary exchange of data between product manufacturer and distributor for the purpose of fulfilling ESG-related regulatory requirements contained in the SFDR, relevant provisions of the Taxonomy Regulation, and the relevant delegated acts complementing MiFID II and IDD. The EET V1 is based on the regulatory situation on the day of publication and will be reviewed regularly depending on the evolving regulation, and at least confirmed annually. With regard to the MiFID target market, the EET interacts with the EMT V4.
The report looks at the major trends in the ESG UCITS market, the impact of the coronavirus pandemic, and the behaviour of ESG and non-ESG funds.
For this Market Insights, EFAMA collaborated with its member associations and strategy consultants at INDEFI to estimate the level and nature of ESG investment by European asset managers at the end of 2019, distinguishing between the ESG strategies applied at the firm level and those applied at the level of individual fund and discretionary mandate. The assets under management covered in the report include EUR 12.5 trillion of investment fund assets and EUR 11.4 trillion of mandate assets.*