Asset managers are urging Brussels to delay implementation of its landmark sustainable investing rules, arguing its deadline is too ambitious given the mammoth reporting task awaiting investment houses.
The European Fund and Asset Management Association has written to regulators asking for more time for the industry to gather information about the environmental, social and governance risks in their portfolios.
The resistance from the investment industry points to the gulf between policymakers’ ambitions for green finance and the thorny reality of implementing a new system from scratch. The European Commission has staked a large amount of political capital on developing the world’s first rulebook for sustainable finance.
A central plank of the EU’s push to fund the green transition, the ESG disclosure regulations aim to clamp down on “greenwashing” by forcing asset managers to provide clear information about the sustainability of their investments.
The rules are set to come into force in March 2021, a deadline that Efama describes as “unrealistic [and] clearly not feasible for the practical application of an entirely new and complex legal framework”.
The trade association, which is calling for a delay until January 2022 at the earliest, is concerned that many data points required by the regulations are not available. “Companies seem unaware of the new regulatory requirements and do not possess the necessary data,” it warned EU regulators in a submission seen by the Financial Times.
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