Sustainable finance being an evolving subject and in order to continue the European Commission’s action plan on financing sustainable growth (adopted in March 2018), the European Commission published on 8 June 2020 three different proposals in this domain.
The first was draft Commission Delegated Regulation (EU) amending Delegated Regulation (EU) No. 231/2013 as regards sustainable risks and sustainability factors to be taken into account by alternative investment fund managers (“AIFMs”). The draft amendment proposes changes to introduce sustainability factors, inter alia, to risk management and conflict of interest policies as well as due diligence procedures of AIFMs.
The second was a draft Commission Delegated Directive to amend Directive 2010/43/EU as regards the sustainability risks and sustainability factors to be taken into account for undertakings for collective investment in transferable securities (“UCITS”). The draft amendment aims to integrate sustainability risks and clarifies the implications of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector. The obligation of undertakings for collective investment in transferable securities to integrate sustainability risks is particularly important where management companies of undertakings for collective investment in transferable securities disclose information with regard to the consideration of adverse sustainability impacts.
Lastly, the European Commission published a set of draft delegated acts concerning the integration of sustainability factors under Directive 2014/65/EU on markets in financial instruments (“MiFID”).
This draft seeks to ensure that end investors have clear information on the social and environmental risks and opportunities pertaining to their investments and to clarify the duties of investment firms while providing their clients with advice on the social and environmental risks and opportunities with respect to their selected investments.