What fund operators need to know about ESG disclosures
Roger van Poortvliet, Global Head of Finance, Impax Asset Management, explains the current crop of disclosure requirements for ESG-related funds as well as what future frameworks and legislation could mean.
Sara Benwell POSTED ON 11/9/2022 8:42:48 AM
Sara Benwell: What are the main ESG-related disclosure requirements that should be on finance teams’ radars?
Roger Van Poortvliet: Unfortunately, we have a lot to deal with in this space and more coming down the pipeline. Key to developments, however, are the Task Force on Climate-related Financial Disclosures (TCFD) regulations, as well as the FCA’s proposed Sustainability Disclosure Requirements (SDR) in the UK, and then there are the proposed reporting standards from the International Sustainability Standards Board (ISSB).
TCFD is a leading standard that’s widely adopted across the world and is now becoming mandatory for over 1300 of the UK’s largest regulated companies and financial institutions. SDR is currently under consultation and the first two ISSB standards will probably be issued in 2023.
"The law firms and accountancy firms and others have provided some well-written briefings, which are generally available to download and read."
Sara: How can finance teams make sure they stay on top of current and future sustainability disclosure regs?
Roger: The law firms and accountancy firms and other firms have provided some well-written briefings, which are generally available to download and read. A number of the same firms are running good briefings.
Sara: What does the growing number of ESG requirements mean for sustainability teams?
Roger: Unfortunately, it means more work! As with the implementation of any new reporting standards, there is an intensive period of work to understand and adapt. New reporting systems will have to be put in place. Regulations will have to be studied and understood. Decisions on what and how to disclose will have to be made. New people may have to be employed.
"Greenwashing is a significant issue to the extent that the majority of all investors don’t believe any fund managers’ claims of being ESG-compliant."
Sara: How can finance teams help make sure that sustainability disclosures do good rather than simply being a box-ticking exercise?
Roger: The most important aspects will be clarity and brevity.
Greenwashing is also a significant issue to the extent that the majority of all investors don’t believe any fund managers’ claims of being ESG-compliant. Clear disclosure will help to redress the balance.
Brevity is also important – reports are currently so long now that the majority of investors are not reading them.
Roger will be speaking at the Fund Operator Summit Europe on 16 November, in London. For more information and how you can register to attend, click here.
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