The European Commission has launched a public consultation on how to better encourage the inclusion of environmental, social and governance (ESG) factors in decision making, particularly looking at the duties of institutional investors and asset managers.
The consultation follows one of the eight recommendations from the interim report from the High-Level Expert Group on Sustainable Finance (HLEG) from July 2017. The report stated two imperatives, first to strengthen financial stability and asset pricing by improving the assessment and management of long term risks and intangible factors of value creation. The second is to improve the contribution of the financial sector to sustainable and inclusive growth by financing long-term needs and accelerating the shift to a sustainable economy.
The consultation is also looking to find out what sustainability factors are the most important for investment entities to consider, as well as the level of impact this would have for different investment entities. It also looks at the relevance of reasons preventing sustainability investments.
The EU Commission intends to adopt an action plan on sustainable finance in the first quarter of 2018.
The consultation is open until 22 January 2018 and is available here.