SFDR, Mifid, PAIs and EU Taxonomy - piecing together the fund regulation in Europe-event held on 15th November
CFA Society Finland welcomed ESG experts Gabriel Wilson-Otto, CFA, Head of Sustainable Investing Strategy at Fidelity International and Nathaële Rebondy, Head of Sustainability - Europe, at Schroders, to speak on the sustainable regulations field, and how this is all pieced together at European and global level. Our board president Toni Iivonen, CFA, acted as the host and moderator for this November breakfast event, held at Hotel Klaus K, Helsinki.
The event started with a presentation by Nathaële concentrating on the European landscape and Schroders approach within the ESG regulations field, namely concentrating on sustainability aspects in the E part. She described the sustainable regulations package and what the effects are for companies, asset managers, investors and advisors. Nathaële went over the SFDR product disclosure templates, Mifid II client sustainability preferences and what this means for companies, and EU taxonomy defining what qualifies as an environmentally sustainable economic activity with six separate environment objectives. For many parts the work in these different regulations is still in progress and there needs to be alignment between terminology and definitions.
In addition Nathaële covered the PAI indicators (principle adverse impacts) containing the environmental and social metrics for companies, sovereigns, and real estate, explaining their nature and what is the current status vs. what are the challenges needed to overcome regarding these indicators to be used effectively.
Gabriel´s presentation gave light into Fidelity´s approach on the sustainability regulations. He covered what sustainable investment means in SFDR context, and how Fidelity classifies sustainable products aligned with EU Taxonomy or the SFDR. Gabriel also went over Fidelity’s Significant Contribution Model measuring contribution of issuers to UN Sustainable Development Goals, and Fidelity’s Do No Significant Harm assessment. Europe has a certain advantage in the pace it has put out sustainability regulation. USA, UK, Singapore and Hong Kong all have different approaches and regulation stages regarding fund disclosures and labeling. When it comes to global harmonization in sustainable regulation, ISSB with leading metric, materiality, and reporting standards, might offer a good solution towards global alignment in sustainability-related disclosure standards.
Finally we had some time for a panel discussion with Nathaële, Gabriel and Toni, added with questions from the audience. The discussion dug a bit deeper into how the speakers feel about the tools for global issues in the regulation harmonization, the many challenges for companies, and should there be just one system for disclosure and classification of investment products or would there be advantage in using many lenses on how to view products and specific situations. The role of ESG data providers were also discussed and what kind of education do Fidelity and Schroders provide for their personnel in the sustainability space. The role of banks and retails investors was also covered by the panel.
As always, we are incredibly thankful to our speakers making our event so interesting as well as our members actively participating!
