Responsible investing: register for the webinar

Knowing what the Ecolabel means, and whether it meets your clients’ needs, will be crucial thanks to another bit of EU regulation that is heading down the tracks. Current EU regulation requires advisers to perform a suitability assessment to make sure that the products they are recommending meet the clients’ needs. The EU is going to amend this process to require advisers to ask their clients about their sustainability preference, and will require advisers to consider these preferences when selecting products to recommend. Knowing how the EU’s sustainable finance action plan is going to shape the market, and what it all means, will be a key skill for any adviser.

 Looking at the longer term, another piece of EU regulation looks set to embed sustainability into what advisers do. The EU’s new Regulation on sustainability-related disclosures in financial services creates a swathe of new requirements for asset managers to disclose to clients about how they manage ESG risks, and whether they consider the impact that products have on environmental factors.

That latter change represents a step-change in regulatory approaches to sustainable finance, which have hitherto only sought to ensure that everyone manages financially material ESG risk adequately. This change will start encouraging advisers and asset managers to think about the impact that investment decisions have on the environment, and to be able to explain that to their clients.

With Brexit looming large, there’s a big question about the effect that all these new EU rules – most of which have not yet come into force – will have in the UK. The UK has its own programme of work underway in sustainable finance, whether it is new FCA rules that will require contract-based pension schemes to consider financially material ESG factors, looming requirements for large pension schemes to create a strategy for how they manage climate-related financial risks, as well as the UK government’s commitment to create its own version of the EU sustainable finance action plan. UK regulators and policymakers are turning their attention to sustainable finance like never before.

They are looking for ways to reshape finance so that it better serves the interests of society and the environment, as well as clients. Sustainability looks set to become something that we all have to consider, not just because clients ask about it, but because the law will require it.

For your invitation and to register for the webinar, please click here.