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EU launches consultation on investor duties and sustainability

14 November 2017 | updated 14 November 2017

Brussels – The European Commission has launched a public consultation on how asset managers and institutional investors could include environmental, social and governance factors when taking decisions. The consultation is part of its wider efforts to mobilize private capital towards green and sustainable investments.

The European Commission launched the public consultation on investor duties and sustainability as a follow-up to one of the eight early recommendations delivered by the High-Level Expert Group on Sustainable Finance (HLEG) in its interim report of July 2017.

Clarifying these duties would help asset managers and institutional investors allocate capital more efficiently by taking into account sustainability risks, rather than merely seeking to maximise short-term financial returns.

“Leading investors know that ESG issues are fundamental to fulfilling their duties, but the law is lagging behind. We need a level playing field for all investors,” said Fiona Reynolds, managing director at Principles for Responsible Investment, which is an observer to the HLEG. “I congratulate the European Commission for recognizing this issue and kicking off this consultation.” 

According to PRI, the consultation will seek evidence on how clarifications or amendments to investor duties can contribute to more efficient allocation of capital and more sustainable and inclusive growth. It will also look at how to ensure that end investors and beneficiaries have the right information to help them make sustainable choices, as well as strategies that leading responsible investors have for considering ESG issues.

The public consultation is open until 28 January 2018 and can be accessed here.