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The time to prepare for the SFDR is now: Get ready for climate change impact

October 26, 2021
By CSE
The time to prepare for the SFDR is now: Get ready for climate change impact

The Sustainable Finance Disclosure Regulation (SFDR) – together with a range of other EU sustainable finance initiatives – is intended to support the European Green Deal, which envisions a European economy that is climate neutral by 2050.

 

Europe’s advanced sustainable finance regulations are reshaping the market for investment, bringing new companies to market, encouraging greater disclosure, and setting a benchmark for the rest of the world. Many companies in Asia are keen to comply with the EU sustainability framework because it will help them attract investment and improve their performance. The urgency to restrain greenhouse gas emissions, including reaching net zero emissions by 2050, has become tangible. Businesses are also feeling the heat of climate change, facing questions from customers, employees, and stakeholders – especially investors – on how they plan to tackle the issue.

 

To achieve climate neutrality, the SFDR focuses on disclosures, which require asset managers and financial advisers to inform investors on how to integrate sustainability risks and opportunities into investment decisions and recommendations. There is a general belief that enabling end-investors to better understand the impact their investments have on society and the environment through increased transparency will encourage them to shift capital toward activities that are less harmful and potentially even positive. By requiring companies to generate and reveal significant sustainability data, investors can address capital to firms that are ready to prosper in the shift to a greener, more equitable economy.

 

The SFDR mainly applies to financial institutions (banks, insurers, asset managers and investment firms, venture-capital funds, credit institutions offering portfolio management or financial advice) operating within the EU. All these institutes must publish on their websites information about their policies on the integration of sustainability risks in their investment decision‐making processes. The regulations and recommendations are meant to transform how companies integrate ESG risk factors into their activities. Climate-change concerns are viewed as the greatest emerging risk, ahead of concerns over covid-19, which hit inflation, regulation, and geopolitics.

 

In December, CSE’S European Certified Sustainability (ESG) Practitioner Program – Digital Version, will bring together business leaders and C-suite executives in corporate responsibility, sustainability, ESG, marketing, and investors’ relations, will address sustainability risks, reshape the market for sustainable investment, reach greater disclosure and set a benchmark for the rest of the world.

 

Registrations are on the rise. Book your place on time.

 

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