A question of time: EU taxonomy sparks race among managers to improve ESG credentials

Asset managers scramble to adapt to new SFDR rules

The EU's sweeping reforms of sustainability regulations will bring greater ESG transparency, but asset managers warn they risk creating a 'green bubble' as investors could rush towards a handful of firms considered truly sustainable in a bid to improve their overall ESG scores.

As of March, the Sustainable Finance Disclosure Regulation [SFDR] will require asset managers to incorporate sustainability risks across their investment processes, product governance and internal systems. This is the first time fund groups will be required to weigh sustainability risks alongside other financial risks before disclosing to investors how these are managed.  As Europe pushes for more transparency, stricter reporting requirements are expected to reveal surprises across the industry. The changing face of impact investing: Greater awareness of social issues and the road ...