The Investment Association (“the IA”) welcomes the opportunity to respond to the European Commission’s proposed Sustainable Finance Package, which will be of key importance in the promotion and development of sustainable finance throughout Europe and across the globe.
The IA represents 250 UK-based investment management firms who collectively manage funds totalling EUR 8.1 trillion, of which EUR 2 trillion is on behalf of European clients. The UK asset management industry is a key part of both the UK and EU’s financial ecosystem, helping millions of individuals save for the long term and enabling them to enjoy a more prosperous retirement.
As significant investors in economies across Europe, it is our role to help investors and savers achieve their objectives – both financial and non-financial. Our members are increasingly witnessing a demand from investors and savers to take into account sustainability and responsible investment strategies. This trend has helped fuel the growth in the responsible investment market and our members are committed to continuing to promote and develop sustainable finance.
Our members fully support the aim of the Disclosures Proposal to increase transparency and enable investors to choose investment products and services with greater clarity and comparability. It is our firm view that any disclosures relating to sustainable investment and sustainability risks should aim to improve transparency with respect to both investment products with particular sustainability objectives and the incorporation of ESG factors into investment decision-making.
To ensure that disclosure practices convey genuinely meaningful information in the growing sustainable finance marketplace, the IA believes it is important to develop principles for disclosure, rather than an overly prescriptive approach that could risk making disclosures a tick-box exercise.
Regarding the disclosure of remuneration policies, we recognise the disincentives that remuneration policies aligned with short term gain can create in our investee companies. We are therefore supportive of aligning remuneration policy with the delivery of sustainable, long term returns for any company, including financial institutions like asset management firms.
The IA supports the European Commission’s commitment to be a global leader in sustainable finance and stands ready to work with the Commission and other key stakeholders to progress this agenda and boost the role of finance in achieving both a well-performing economy and one that also delivers on environmental and social goals.
Please find attached our full response.
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