ESG

Recent Articles

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  21.07.2023

  Future regulatory regime for ESG ratings providers: the wholesale markets response

  On 30 June 2023, the International Swaps and Derivatives Association ("ISDA”) and the Association for Financial Markets in Europe (“AFME”) (the “Associations”) published a Joint Associations Response (the “Industry Response”) to HM Treasury’s Consultation on the future regulatory regime for environmental, social and governance (“ESG”) ratings providers (the “Consultation”). We have previously written about the development of a Voluntary Code of Conduct for ESG Ratings and Data Product Providers (the “Voluntary Code”)....

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  23.06.2023

  The ESG journey in the United Arab Emirates

  With the UAE due to host the 28th session of the United Nations Conference of the Parties (“COP”) in November this year (COP 28),[1] there has perhaps never been a greater spotlight on, or opportunity for, ESG momentum in the region. Following the publication of the Middle East proposals for the region’s sustainability focus, we take a closer look into the position in the Middle East and UAE ahead of the UAE hosting COP 28. We will also draw some comparison with the UK’s recently published and proposed investment labelling and disclosure regime (“SDR”).What is...

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  15.12.2022

  FCA - Understanding approaches to D&I in financial services

  The FCA conducted its review via 12 regulated firms – 8 with large gender pay gaps and 4 with relatively small pay gaps. The average pay gap for the financial services market is 26.6%, which is far higher than the average for the wider UK market which is 12.1%. In conducting its review, the FCA asked each firm for some basic information including about their D&I policy and strategy, target setting initiatives and D&I data used. The FCA also requested a 90-minute structured interview with a senior individual and any relevant specialists at each firm. It is clear from the review that...

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  29.11.2022

  New code of conduct for ESG ratings and data providers

  Many firms are making their ESG claims heavily reliant on the use of unregulated ESG data and ratings providers. This is particularly problematic as data availability and ESG resources can be challenging. There is often frustration from financial services firms at some ESG data and ratings providers' lack of transparency on their methodology in assessing and scoring how green or socially impactful an investment prospect may be, and in the accountability the providers have for their services. Financial services firms are themselves in the firing line for greenwashing, and while they try to meet...

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  17.11.2022

  ESG: A summary of the FCA’s Sustainability Disclosure Requirements (SDR) and investment labels consultation paper (CP22/20)

  The updated proposals are materially different to those set out in the FCA’s November 2021 Discussion Paper (DP21/4), reflecting the strength of feedback on the Discussion Paper and the fast pace of change in this area both in the UK and internationally. A remarkably long 179 pages, the Consultation Paper has a substantial amount of information to consider that will impact not only product and entity level disclosures, but governance and organisational requirements too. We recommend that clients establish the impact of the Consultation Paper proposals as soon as possible, with a view to providing...

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  14.10.2022

  ESMA Guidelines on suitability updated to take into account sustainability factors, risks and preferences of the clients

  Firms (that are inter alia investment firms and credit institutions) (i) providing investment advice or portfolio management or (ii) selling or advising clients in relation to structured deposits have to provide suitable personal recommendations to their clients, in particular to their retail clients, or they have to make suitable investment decisions on behalf of their clients. In order to match clients with suitable investments, Firms should establish policies and procedures to ensure that they consistently take into account: (i) all available information about the client necessary to assess...

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