Global Trustee and Fiduciary Services News and Views Issue 50

Prime, Futures and Securities Services | XXXXXX 18 CMU SERIES: SUSTAINABLE FINANCE (2018-2019) EU Commission’s Action Plan for a greener and cleaner economy has three overall aims — Actions 7 & 10 below have specific impacts for the asset management sector. Reorient capital flows towards sustainable investment in order to achieve sustainable and inclusive growth Action 7: Clarifying institutional investors’ and asset managers’ duties — Subject to outcome of impact assessment, European Commission will table a legislative proposal to clarify institutional investors’ and asset managers’ duties which could: i) explicitly require institutional investors and asset managers to integrate sustainability considerations in the investment making process and ii) increase transparency towards end-investors on how asset managers integrate sustainability factors in their investment decisions (Q2, 2018) Action 10: Fostering sustainable corporate governance and attenuating short-termism in capital markets — Assess the possibility of: i) requiring corporate boards to develop and disclose a sustainable strategy, including appropriate due diligence throughout the supply chain and measurable sustainability targets and ii) the need to clarify rules according to which directors are expected to act in the companies’ long-term interest (By Q1, 2019) 1 2 3 Foster transparency and long-termism in financial and economic activity Manage financial risks stemming from climate change, resource depletion, environmental degradation and social issues