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Industry Updates

New ESG Disclosure Requirements for Asset Managers

27 Feb 2020

The EU has introduced a new piece of legislation in relation to sustainability-related disclosures in the financial services sector (the "Disclosure Regulation")1. This prescribes disclosures to be made by asset managers and investment funds relating to sustainable investments and sustainability risks from 31 March 2021.

It applies to EU asset managers but may also have implications for non-EU asset managers.

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


The European Commission's Green Finance program, including its Action Plan for Financing Sustainable Growth (including 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 force2. It comes into effect on a phased basis beginning in March 2021.

Complementary legislative changes to the UCITS, AIFMD and MIFID regimes are also in train.


The Disclosure Regulation introduces requirements for a wide range of entities providing investment management and advisory services to clients, including AIFMs, UCITS management companies, investment firms authorised under MiFID providing portfolio management services (collectively referred to as "financial market participants") and firms providing investment advice services under MiFID ("financial advisers").

Non-EU Asset Managers can be in Scope

While EU asset managers are fully in scope, the Disclosure Regulation can also apply to non-EU asset managers.

There are a range of legal and operational elements to consider from a scope perspective for non-EU asset managers. Relevant factors will include the nexus of their funds, their marketing activity and their clients to the EU. 

For example, the manager of a non-EU AIF marketed in the EU on a private placement basis (under the National Private Placement Regime) will be in scope for certain aspects of the Disclosure Regulation.

If you are a non-EU asset manager with European-marketed funds or clients, we would be pleased to analyse your model and advise on the specific requirements of the Disclosure Regulation that will apply to you and your funds.

ESG-Focussed Funds

The Disclosure Regulation contains requirements that apply to 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-Focussed Funds", as follows:

(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 – to include disclosure on: (i) how the firm integrates sustainability risk into the investment process; (ii) how the firm integrates sustainability risk into its remuneration policy; and (iii) for any ESG-Focussed Funds it manages, details on the ESG objectives of these funds and how they are measured.
  • Offering documentation / pre-contractual disclosures – to include disclosure on (i) how sustainability risks are factored into investment decisions; (ii) the adverse sustainability impact of the investment decisions; and (iii) for any ESG-Focussed Funds it manages, details on the ESG objectives of these funds and how they are measured.
  • Annual report disclosures – the annual report of an ESG-Focussed Fund will need to provide details of how the relevant ESG objectives are being met.

How can the Maples Group help?

We can advise both EU and non-EU asset managers on the scope of the Disclosure Regulation and the practical and legal steps required to ensure compliance with its obligations.

The Maples Group has also 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.

Print Ready Version

1. EU/2019/2088

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

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