Environmental, social and governance: financial services

Few issues have attracted focus, attention and at times controversy, in the same way as environment, social and corporate governance (ESG) issues.

It is therefore unsurprising we have seen an increased interest by regulators in legislation surrounding these issues, presenting new challenges for individuals, businesses and governments.

Financial services initiatives on ESG matters are steadily developing, with a large body of rules and regulations coming into force that will have direct and comprehensive impacts on financial services institutions and the products they manufacture.

Our leading financial services practice works with key industry bodies in the ESG space to ensure we stay at the forefront of regulatory developments and understand the impacts such regulation is likely to have on the sector.

Ways that we can help you: 

Helping you to scope

We can assist with initial scoping exercises to determine which products will be affected by the various forthcoming regimes (or which regimes are relevant). We can assist you with an obligation tracker, which may be used to identify and document implementation steps and may subsequently be used as an audit trail.

Helping you to interpret and implement

Interpreting new laws is a key skillset. Combined with our broad view of the market, we can help you to understand your obligations and prepare commercially-acceptable outputs.

Crafting disclosures

We have hundreds of hours of experience working on ESG product disclosures and are well placed to help you prepare product descriptions that will satisfy the regulator but still resonate with investors.  We are well versed in plain language drafting and serve as counsel to the IA Investor Communications working group.

Training

We offer a series of training sessions covering broad ‘what is out there’ discussions to ‘deep dives’ into specific regimes.

These can be structured as discrete, discursive workshops or used as part of your internal education and awareness campaign. In light of COVID-19 we would add that training can be delivered virtually.

International regulatory monitoring

Our RegNet team has been monitoring ESG developments closely throughout Europe and beyond and is working with various stakeholders to develop helpful tools and trackers for clients. We also maintain a database of essential reading, including mandatory local laws, policy frameworks and guidance, for these jurisdictions.

Related services include:

• helping pensions trustees to formulate pension funds’ statements of investment principles
• assisting with the outsourced provision of responsible investment oversight
• helping firms to prepare a responsible investment policies

Our recent experience includes: 

• establishing the UK’s first CAIF (an FCA-authorised Charity fund), which featured responsible investment characteristics, and have since launched/converted five more
• revising and updating existing sustainable policies for a leading asset manager’s sustainable range to satisfy existing regulatory disclosure requirements
• advising on the structuring and launch of the first Energy Efficiency fund in the UK and subsequently advising on the launch of a number of other energy efficiency funds
• helping to launch new carbon screening funds for local government authorised contractual schemes
• advising on structuring and launching a £100m closed-end fund of funds which provides support to develop the circular economy ecosystem in London by supporting early-stage circular economy businesses
• launching a PAIF investing in homeless shelters as an asset class
• launching of a variety of products with climate and carbon focus, such as Epworth Climate Stewardship Fund for Charities
• advising a leading asset manager on the launch of a new ESG sub-fund and distribution in Hong Kong
• advising the lead investor in a £500m investment fund which will help achieve London's ambition of being a zero carbon city by 2050
• working on a number of ethical and Shari’ah-compliant investment funds

If you require assistance with scoping, planning and implementation of any ESG projects, please get in touch with a member of the team.