Requirements emanating from the EU’s Sustainable Finance Disclosure Regulation (SFDR), which are broad in scope, impacting not only asset managers but also other financial market participants including the likes of insurers, pension providers, as well as qualifying venture capital and social entrepreneurship managers. Julian Ide explains the significance of the SFDR

In recent years, the demand for ESG products from investors has grown quite rapidly with no signs of slowing down. Investors increasingly want products that better reflect their values and beliefs, and therefore, have a positive impact on our world, while also delivering sustainable financial returns.

What does the regulation mean for investors?
The real economy is shifting, and consumers are looking for more sustainable choices. Take the energy sector as an example where renewable energy previously was not available. Now ‘green energy’ has become an option that is widely acceptable with providers— energy that has been produced in a sustainable and environmentally friendly manner.

A research study by Franklin Templeton in the UK revealed how strongly younger workplace pensions savers feel about ‘responsible investment’. Up to 78% feel their current pension provision does not align with their values, or do not know if it does. Importantly, 45% of respondents would be motivated to increase their contributions if their pension incorporated responsible investment values.

Investors want their provider to become more motivated in telling investors how they are integrating ESG factors into their business strategies and identifying new products which puts sustainability at the top of their requirements. With the advent of increased sustainability-related disclosures being made available in the public domain, which should be published on websites, this should provide investors with verifiable requirements for sustainability claims.

Read more @International Investment