SBAI » ESG

Bringing managers and investors together to set standards for the alternative investment industry

ESG

At the SBAI, we support efforts to facilitate fair and efficient markets, and enable investors to make well-informed investment decisions. Accurate and timely disclosure of all types of risk, including ESG risks (where applicable), are a critical input to investors’ risk management processes.

Regulators globally are on a journey to increase the level of ESG disclosures, particularly for climate-related risks. We have responded to consultations from regulators focusing on the importance of:

  • Consistency between regulators
  • Sequencing and Implementation of Rules
  • Proportionality of requirements

 

U.S. Securities and Exchange Commission (SEC) SEC requests for public input on Climate Change Disclosures:

Whilst this consultation related to disclosure by issuers, we responded with several key points that should govern any regulatory approach to ESG disclosures:

  • Making use of existing ESG disclosure frameworks
  • Ensuring global consistency of disclosure requirements
  • Considering other ESG risks in addition to climate
  • Proportionality of requirements
  • Sequencing and Implementation – disclosure should be mandated at the issuer level before the asset manager level

 

Securities and Futures Commission of Hong Kong (SFC HK) SFC publishes a consultation paper on the Management and Disclosure
of Climate-related Risks by Fund Managers

In response to a consultation on asset manager disclosure we raised the following points:

  • Disclosure should be mandated at the issuer level before the fund manager level.
  • Climate risk is being elevated as a risk factor and treated differently from the typically principles based approach to risk management regulation.
  • Any risk management regulations should retain flexibility given the diverse nature of the alternative investment industry.
  • Enhanced standards should apply to fund managers running dedicated ESG products rather than managers over a certain AUM threshold.