The sustainability agenda is inevitably resulting in a wave of new regulation for alternative asset managers as well as the wider business community, a trend which looks set to continue in the coming years.
Despite the challenges of the COVID crisis, the climate emergency remains centre stage for policy makers in the UK and the EU, and the Biden administration has already brought the US back into the fold on climate action. As the UK hosts COP 26 this year, the UK Government is keen to demonstrate leadership on climate issues; the commitment from both the UK and EU to be carbon neutral by 2050 is already a catalyst for legislative action.
The EU's sustainable finance action plan, which is aimed at funding the EU's ambitions in the European Green Deal, will impose important new obligations on many asset managers and financial advisers from March this year. The EU's reforms are potentially game-changing – and not just for EU-regulated firms. Any firm based in the UK or elsewhere wanting to access EU-based investors or invest in EU companies will be affected.
The UK meanwhile has already begun work on its post-Brexit ESG regime, announcing that it will be first jurisdiction in the world to make reporting under the Taskforce on Climate-related Financial Disclosures mandatory, affecting almost all UK-regulated asset managers (including alternative investment fund managers). We are also expecting the UK to implement its own, perhaps more principles-based, version of the EU's Sustainable Finance Disclosure Regulation, alongside a UK-specific version of the EU's taxonomy which will define the types of activity that are “environmentally sustainable” for the purposes of regulated investment activities claiming to focus on sustainability.
Our webinar series - Sustainability and alternative asset managers: the new normal
As part of our response to these developments, in January we launched a series of webinars on the theme of "Sustainability and alternative asset managers: the new normal".
We hosted our first webinar in the series, "How the EU's Green Deal and Sustainable Finance Action Plan will affect private markets", on 21 January 2021. The webinar featured a keynote speech from Nathan Fabian, Chief Responsible Investment Officer at the UN-backed Principles for Responsible Investment (PRI) and Chairperson of the European Platform on Sustainable Finance, followed by a lively panel discussion, chaired by our Senior Partner, Kathleen Russ.
Joining Nathan and Kathleen on the panel were Vanessa Maydon, Corporate Affairs Director at Cinven and board member of Invest Europe, Mark Fawcett, CIO at NEST, and Simon Witney, Senior Consultant at Travers Smith and BVCA Council member.
Our webinar focussed on the impact of the EU's highly ambitious regulatory agenda, principally on private markets, and the work of the PRI to support those policy objectives. This is a note of the key points from the webinar, including the keynote presentation, the panel discussion and the Q&A which followed.