Sustainable investment products
Sustainability assessments in the EU should become more transparent
The EU wants more people to invest their money instead of saving it. In order to increase trust in sustainable investment products, stricter rules will apply to the evaluating companies in the future.
In the EU, stricter rules will apply in the future for providers of sustainability assessments for companies or investment products. In Brussels, EU countries adopted new regulations aimed at strengthening investor confidence in sustainable financial products. Accordingly, sustainability assessments, so-called ESG ratings, should become more reliable and comparable.
In order to achieve this, the transparency and integrity of the activities of ESG rating providers should be improved and potential conflicts of interest should be avoided, the countries said. For example, providers of these ESG ratings established in the EU would have to be authorized and supervised by the European Securities and Markets Authority (ESMA) and meet transparency requirements, especially with regard to their methodology and their sources of information. “ESG ratings are becoming increasingly important for the functioning of capital markets and investors’ trust in sustainable investment products,” it said.
The new rules were based on a proposal from the EU Commission last year, which was negotiated by representatives of the member states and the European Parliament. They should now be published in the EU Official Journal and come into force 20 days later. The abbreviation ESG stands for Environmental, Social and Governance.
dpa
Source: Stern
