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ESG: EU Regulatory Change and Its Implications
ESG: EU Regulatory Change and Its Implications
December 2022
By Lewis Davison, Fiona McNally, and Charlotte North
Despite recent changes to the financial landscape, global ESG assets under management are projected to see substantial growth over the next few years1. However, as ESG assets grow, regulators are likely to require more transparency from institutional investors with hopes to increase comfort for investors regarding the sustainability claims from these firms. Considering the international business model that most asset managers, asset owners and pension fund providers have, the potential regulations in the EU could add a layer of complexity to the various challenges ahead.
To address these potential challenges cost effectively and reshape their organization for the ESG challenges and opportunities to come, institutional investors need to proactively consider the solutions available, so they can better understand the impact of ESG factors on their portfolios and facilitate effective regulatory reporting processes.
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