Much progress has been made in the two decades of inter-governmental and international negotiations between the signature of the 1997 Kyoto Protocol and the 2015 Paris Agreement to clarify the guiding principles of environmental sustainability.
France has not been behind the curve and enacted the Law on Energy Transition for Green Growth, which came into force on 1 January 2016. It requires institutional investors to publish information on how criteria relating to Environmental, Social and Governance quality (ESG) objectives are taken into account in their investment policy and what they are doing to help achieve energy transition and environmental goals.
It is also important to note the European commitment to reinforce financial stability by incorporating environmental, social and governance factors into investment decision-making.
Corporate Social Responsibility (CSR) thus goes right to the heart of finance.
January 2018: publication of the final report of the High Level Expert Group (HLEG) on Sustainable Finance.
November 2018: AMF Roadmap for Sustainable Finance.
December 2018: ESMA/EIOPA Consultation on integrating sustainability risks and factors in the UCITS/AIFM and MIFID 2 directives.
January 2019: publication of an EU reflection paper on how Europe could achieve sustainable development objectives by 2030.
Challenges and Opportunities
The challenges for institutional investors and management companies
- High cost of implementing ESG regulation.
- Lack of a shared definition of sustainable activity.
- Lack of harmonisation of the methods used for ESG activities by businesses.
- Collection and disclosure of ESG data of issuers very difficult to achieve.
Opportunities: How can CACEIS help you?
CACEIS has developed a solution for providing essential ESG – Climate data to its clients to optimise how they assess the risks associated with their investment policies and compliance with regulatory requirements.
CACEIS's ESG – Climate Reporting offer forms part of our clients' CSR approach and investment strategy to promote a sustainable economy.
From managing climate risk…
CACEIS's ESG – Climate Reporting solution provides institutional investors with the information they need to oversee monitoring and management of the risks associated with climate change (physical risks), or that result from the transition to a low-carbon economy (transition risks).
…to the opportunities associated with the financing of energy transition
CACEIS's ESG – Climate Reporting solution helps our institutional investor clients and management companies to evaluate the quality and performance of their portfolios according to ESG - Climate criteria and to provide fully transparent information on the social and environmental impact of their investment decisions.
The ESG-Climate Reporting solution offers a global and synoptic vision of the ESG and Climatic performance of portfolios. It is compliant with regulatory requirements.
The CACEIS solution can be used both to accurately measure the risks associated with climate change and to take advantage of the commercial opportunities associated with investors' growing interest in sustainable finance.