Firms such as Legal & General Investment Management and Standard Life Aberdeen are well positioned to gain inflows for sustainable investments, a credit ratings agency said.
Moody’s said recent EC proposals on sustainable finance were likely to raise asset managers’ operational and compliance costs and were a “credit negative” for the industry.
But firms with the right infrastructure will gain flows from investors wanting strategies related to environmental, social and governance (ESG) investing.
Moody’s also cited Aviva and Amundi as likely to benefit, as well as Mirova, a responsible investment specialist.
Operational and compliance costs would weigh on profits as a result of the proposals, which stem from the EU Action Plan on Sustainable Finance.
The proposals, which include integrating ESG analysis into investments, were “likely to be disruptive at first as asset managers face increased execution risk”, said Moody’s
The proposals also carry more stringent disclosure requirements for firms in the EU operating ESG strategies.
Moody’s estimates that asset managers’ costs could increase by 0.25%-2% depending on their current ESG capabilities.
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