ESG: The Top 10 things traders need to know

ESG (Environmental, Social, and Governance) is rapidly becoming the key topic of 2019. News that the European Commission has now formally incorporated new legislation on sustainability disclosures1 will only speed up adoption of ESG factors within the investment process. Asset managers will not only be required to integrate and disclose sustainability risks within their portfolios but will also be required to disclose any adverse sustainability impacts on fund returns and also the climate for the first time. While asset managers will need to adjust portfolios to incorporate this new legislation—what will this mean

for traders?

Earlier this year we wrote about the key issues that would impact the future of the Asset Management industry—which included data, technology and ESG2. Having attended four conferences in as many weeks Oslo Bors, FIX Nordics, EPFR ClearMacro and European Sustainable Investment Summit, it is clear that the ESG and Sustainable Finance is gathering critical momentum in Europe—and the speed at which this is developing requires all of us in the industry to sit up and take notice. Some may be further along the path of enlightenment than others, but the incorporation of ESG and Sustainable Investment strategies into mainstream asset management is creating challenges and opportunities for all. During the summer, we spoke to 32 individuals comprising of Heads of ESG, RI, Stewardship and CIOs at firms representing $8.2 trillion assets under management as

well as ESG data providers to understand how these challenges are being addressed and where the greatest opportunities are unfolding as the sustainability revolution redefines the asset management industry. Here’s what we have learnt:

Read the full paper here