ESG: Data Takes Center Stage

The debate over whether ESG will become the mainstay of all future investments is over. To date Europe has dominated ESG regulatory policy but this looks set to change. From a commercial perspective the increased end investor interest in ESG also shows no sign of abating. Direct action towards longer-term investment in sustainable finance is set to become the global mantra for 2021.

However, despite the increasing interest, the asset management industry cannot simply flick an ESG switch. As sustainability moves mainstream, asset managers need to focus on the long-term viability of company business models which will redefine how investments are made and assessed, leading to changes in brokerage services and data requirements–all within rising regulatory guidance. ESMA has proposed improved transparency under the EU Sustainable Finance Disclosure Regulation which has the potential to impact investments globally, as the proposed disclosures will apply at the product as well as the entity level, meaning any firm that markets a product to an EU investor is potentially in scope.

The report has been compiled by Rebecca Healey and Charlotte Decuyper , Liquidnet Regulatory Consultants