The Alfi London conference panel on “The ESG journey, where are we?” held yesterday explored how ESG regulation and taxonomies have altered asset managers’ operations, emphasising transparency and driving investor demand for ESG-integrated funds.
Moderated by Maren Stadler-Tjan, partner, Clifford Chance, the panel was attended by Arthur Carabia, director of ESG policy research, Morningstar Sustainalytics; Elena Cardella, head of global fixed income investment specialists team, Amundi (UK) Ltd and Stephanie Lhomme, head of forensic investigations, corporate intelligence & litigation support – Europe, Arendt Regulatory & Consulting S.A.
Elena Cardella shared that Amundi “follows a cautious approach, stays conservative and keeps options open for clients” amid revisions in regulation such as the Sustainable Finance Disclosure Regulation (SFDR).
Responding to the moderator’s question about Amundi reclassifying funds in the light of fund labelling overhaul- especially with the bar for Article 9 being high, Cardella shared that while some have been reclassified from Article 9 to 8, the firm has also started setting minimum sustainable investment for each product to remain loyal to internal standards.
Arthur Carabia cited that roughly 11,000 funds are classified as Article 8 and 1000 as Article 9 funds. Article 8 constitutes a big chunk of the market as the bar is low, he pointed out.
The issue of estimates needs to be addressed in the SFDR consultation, he highlighted. “Out of fear, people are using very conservative figures – if not no figure. The ultimate data points should be meaningful for retail investors.”
According to Stephanie Lhomme: “Major regulators in the EU, the US and the UK are building enforcement taskforce – Germany has been the most active – against greenwashing, and also focussing on the reliability of the data.”
Climate litigation has grown globally and is extending to encompass new areas like human rights, diversity, and inclusion. This expansion includes actions not just against companies that lack ESG focus but also those that fall short of their stated initiatives and aspirations, Lhomme pointed out. Proper due diligence goes beyond a tick-the-box assessment to sophisticated investigation and supply chain, she added.
The panellists said they looked forward to the European Commission’s open consultation concerning regulation on sustainability-related financial disclosures which is open for feedback till December 15, 2023.
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