Global consensus has emerged that actively considering ESG is in line with fiduciary responsibility.
According to the UNEPFI report Fiduciary Duty in the 21st Century (2019) and the PRI Regulation Map, forty-eight of the top 50 global economies now have some form of policy designed to help investors consider sustainability risks, opportunities or outcomes. Examples include:
- The 2019 EU investor disclosures regulation requires investors to disclose how sustainability risks are integrated into investment processes. In parallel, the EU is working to amend the rules underpinning key sectoral legislation (such as MiFID II and Solvency II) to clarify that sustainability should be considered by an investor in the fulfilment of their duties.
- The central banks’ Network for Greening the Financial System acknowledged in April 2019 that climate change is a source of financial risk and finance ministers from more than 20 countries launched a coalition to promote climate action.
- In 2019, IOSCO, the international securities regulators organisation, and IOPS, the international pensions supervisor’s organisation, finalised consultations on ESG integration and disclosure for listed companies and pension fund regulators and released the IOPS Supervisory Guidelines on the Integration of ESG Factors in the Investment and Risk Management of Pension Funds.
