A new EU Disclosure Regulation EU/2019/2088 ("Disclosure Regulation") on disclosures to be made by asset managers and investment funds relating to sustainable investments and sustainability risks has been made.

It forms part of a range of new EU legislative measures focused on sustainable finance.

Background

The European Commission's Action Plan for Sustainable Finance sets out the EU strategy to integrate environmental, social and governance ("ESG") considerations into its financial policy framework and mobilise finance for sustainable growth. In December 2019, as part of this strategy, the Disclosure Regulation entered into force1.

Scope

While the Disclosure Regulation introduces requirements for a wide range of entities providing investment management and advisory services to clients, this note focuses on the impact for asset managers (i.e. AIFMs, UCITS management companies and investment firms authorised under MiFID II providing portfolio management services).

The Disclosure Regulation contains requirements that apply to those asset managers directly. It also sets out requirements that apply to any investment funds (or segregated mandates) that they manage.

Additional requirements apply to certain types of ESG-focused funds, namely:

    (i) ESG-labelled investment funds (i.e. investment funds which promote environmental or social characteristics);
    (ii) Sustainable investment funds (i.e. investment funds with a sustainable investment objective); and
    (iii) Carbon reduction investment funds (i.e. investment funds that aim to reduce carbon emissions).

Key Points

There are three key elements of the Disclosure Regulation that asset managers will need to consider:

  • Website disclosures;
  • Prospectus / pre-contractual disclosures; and
  • Annual report disclosure.

Each of these elements is considered in more detail in our Table.

How can the Maples Group help?

With strong support from the Irish Government, the Central Bank of Ireland and local industry, we believe that Ireland will build on its highly successful funds and investment management sector and become a global centre of excellence for sustainable investment funds. We have produced a Guide focusing on sustainable investment fund strategies to help promote environmental, social and governance aims.

Further Information

Should you have any queries or comments on the implications of the Disclosure Regulation or the impact of the European Commission's Sustainable Action Plan on your business, please feel free to contact any of the team below or your usual Maples Group contact.

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1 The Low Carbon Benchmarks Regulation came into force at the same time.

CONTACTS

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Peter Stapleton

Partner

+353 1 619 2024

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Stephen Carty

Partner

+353 1 619 2023

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Ian Conlon

Partner

+353 1 619 2714

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John Gallagher

Partner

+353 1 619 2073

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Philip Keegan

Partner

+353 1 619 2122

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Deirdre McIlvenna

Partner

+353 1 619 2064

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Aaron Mulcahy

Partner

+353 1 619 2104

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Eimear O'Dwyer

Partner

+353 1 619 2065

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Emma Conaty

Head of Global Registration Services

+353 1 619 2708

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Adam Donoghue

Partner

+44 20 7466 1711

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Pádraig Brosnan

Partner

+1 345 814 5441

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Michelle Lloyd

Partner

+852 3690 7504

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