Memo #
32970

Call on AIFMD Consultation ESG-Related Questions - 14 December, 16:00 GMT/11:00 a.m. ET
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[32970]

December 8, 2020 TO: ESG Task Force
EU ESG Disclosure Regulation Working Group
ICI Global Regulated Funds Committee RE: Call on AIFMD Consultation ESG-Related Questions - 14 December, 16:00 GMT/11:00 a.m. ET

 

We will host a call on AIFMD consultation ESG-related questions next Monday, 14 December at 16:00 GMT/11:00 ET. 

We distributed a calendar call invite with Zoom instructions to EU ESG Disclosure Working Group. If you would like to join the call but you have not yet received a calendar invite, please email me at adriggs@ici.org.

The European Commission’s recent consultation on potential changes to the Alternative Investment Fund Managers Directive (AIFMD) includes a series of questions related to ESG/sustainable finance (see attached excerpt)[1].  We expect the Commission’s approach to the AIFMD to carry over to the UCITS Directive, and these questions indicate a focus on quantifying ESG integration (i.e., consideration of sustainability risk) and requiring asset managers to consider sustainability impact in the investment process as follows:

  • Questions 62 and 71 focus on disclosure of sustainability-related information in the AIFMR supervisory reporting templates to capture risks to financial stability.
  • Question 90 asks whether AIFMs should be required to disclose sustainability risks in quantitative (rather than qualitative) terms.
  • Question 91 asks whether all AIFMs should be required to integrate consideration of adverse sustainability impact (i.e., ‘double materiality’) in the investment process.
  • Question 92 asks whether, how, and at which level (at the AIFM or product level) AIFMs should be required to integrate adverse sustainability impacts in the quantification of sustainability risks.
  • Question 93 asks whether and how AIFMs should be required to take into account the long-term sustainability and social impacts of their investment decisions beyond what is currently required by the EU law (such as environmental pollution and degradation, climate change, social impacts, human rights violations).
  • Questions 94 and 95 asks whether the EU Taxonomy or any other sustainability-related requirements or international principles should be considered when AIFMs are making investment decisions.

This appears to contemplate going significantly beyond the draft delegated acts that the Commission consulted on earlier this summer that would amend the AIFMD and UCITS Directive to add consideration of sustainability risk (and to which we responded[2]).

We welcome your active participation in the call and, of course, do not hesitate to contact us ahead of the call with any thoughts and comments.

 

Anna Driggs
Director and Associate Chief Counsel
ICI Global

 

Attachment

endnotes

[1] Please see Consultation document: Public consultation on the review of the alternative investment fund managers directive (AIFMD), available at https://ec.europa.eu/info/files/2020-aifmd-review-consultation-document_en; see also Memorandum No. 32887, available at https://www.iciglobal.org/iciglobal/pubs/memos/memo32887.  

[2] See Memorandum No. 32584] (dated 6 July 2020), available at https://www.iciglobal.org/iciglobal/pubs/memos/memo32584.