Ezra Zahabi Talks ESG Investment Regulations in the EU with CCBJ

Corporate Counsel Business Journal has featured Akin Gump financial regulatory partner Ezra Zahabi in the article “European Union Further Refines Its Sustainable Investment Regulations,” regarding the current state of environmental, social and corporate governance (ESG) investment regulations in Europe and their impact throughout the region.

Among the topics discussed:

Newly implemented ESG requirements stemming from the United Nations Framework Convention on Climate Change: “The two new regulations are the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation. The SFDR basically introduces a new regime of disclosures around ESG issues for investment managers and other ‘financial market participants.’ […] The Taxonomy Regulation chiefly focuses on environmental issues but it provides a potential framework also for the social and governance issues. The focus at the moment is very much on the environmental issues and on climate change in particular.”

How these regulations will affect financial institutions: “[T]here’s going to be a need for the senior management at these financial firms to really think about what the firm is actually doing, how far are they willing to go, what they are really going to change if they want to state in their disclosures that they do consider ESG impacts. They will need to engage with investors to understand what their expectations are now and where they think the asset managers and leaders are going in the future.”

Brexit’s impact on regulation compliance: “[T]he UK is going to have its own regime, which it has stated will be closely aligned with the SFDR. It is unlikely to be identical to the SFDR, and the devil may well be in the detail there. The longer-term hope is that once the political dust of the UK’s withdrawal from the EU settles, there will be some kind of an equivalency decision or a substitutive compliance mechanism.”

To read the full article, please click here.