EU rules on responsible investments to kick in from 2021 - document

By Francesco Guarascio BRUSSELS (Reuters) - European Union finance ministers are set to adopt new rules this week that will require asset managers, insurers and pension funds to disclose environmental and social risks in their investments from 2021. The overhaul is expected to bring more clarity to the lightly regulated sector of responsible investing, and could set a global standard for the growing industry of green and socially-conscious loans, worth nearly $100 billion (£77 billion) this year

Reuters November 05, 2019 00:08:41 IST
EU rules on responsible investments to kick in from 2021 - document

EU rules on responsible investments to kick in from 2021  document

By Francesco Guarascio

BRUSSELS (Reuters) - European Union finance ministers are set to adopt new rules this week that will require asset managers, insurers and pension funds to disclose environmental and social risks in their investments from 2021.

The overhaul is expected to bring more clarity to the lightly regulated sector of responsible investing, and could set a global standard for the growing industry of green and socially-conscious loans, worth nearly $100 billion (£77 billion) this year.

EU legislators reached a preliminary deal on the reform in March, but its implementation date was linked to the final approval of the new legislative text.

That definitive green light will come on Friday when EU finance ministers gather in Brussels for a regular meeting, an EU document released on Monday said.

The new law sets uniform rules on how financial firms should inform investors about environmental, social and governance (ESG) risks and opportunities linked to investments.

Financial firms which claim to pursue a green or social investment strategy will have to detail the impact of their investments, disclosing any that could pollute water, damage bio-diversity or cause large layoffs for example.

That is meant to reduce so-called "greenwashing" whereby asset managers and funds try to lure climate-conscious investors claiming green credentials that they do not deserve.

The new rules will be applicable 15 months after their publication in the EU official journal, which is expected in the weeks after Friday's final approval. This means they could be in force at the earliest from February 2021.

Global green and ESG-linked loans totalled $71.3 billion at the end of the third quarter of this year, more than double from $32 billion in the same period in 2018, according to Refinitiv LPC.

EU legislators are also negotiating the adoption of new standards on green bonds to clearly define a "taxonomy" for what makes a sustainable bond and further boost a market expected to expand to $250 billion this year.

Talks are under way to decide whether funding of nuclear projects could be deemed as green, an option supported by France and other countries which rely on atomic energy for their domestic electricity consumption - but opposed by many others and by the European Parliament.

(Reporting by Francesco Guarascio; editing by Philippa Fletcher)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Mexico's Senate approves sweeping cannabis legalization bill
World

Mexico's Senate approves sweeping cannabis legalization bill

MEXICO CITY (Reuters) - Mexico's Senate approved a sweeping cannabis legalization bill in a lopsided 82 to 18 vote on Thursday, paving the way for the creation of the world's largest legal marijuana market if the initiative passes the next hurdle in the lower house of Congress. Lawmakers are rushing to secure approval before the end of the current congressional session in mid-December

Oil prices slip as surge in virus cases raises concerns about demand
Business

Oil prices slip as surge in virus cases raises concerns about demand

By Jessica Resnick-Ault NEW YORK (Reuters) - Oil prices slipped on Thursday as hopes for a vaccine were overshadowed by a surge in new cases of the coronavirus around the world, which raised concerns about the outlook for crude demand. Brent crude settled down 14 cents to $44.20 a barrel

Global Markets: Stocks rise, dollar falls on talk of new U.S. stimulus
Business

Global Markets: Stocks rise, dollar falls on talk of new U.S. stimulus

By Alwyn Scott NEW YORK (Reuters) - Stocks rallied while the dollar fell on Thursday, and oil settled lower but rose after hours following a report that U.S.