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Institutional investors' and asset managers' duties regarding sustainability

EESC opinion: Institutional investors' and asset managers' duties regarding sustainability

Key points:

The EESC

  • welcomes the design of the Action Plan on Financing Sustainable Growth and the legislative proposals stemming from it;
  • supports that fiduciary obligations of financial market participants will help end investors to bring their sustainability preferences into line with their informed investment decisions;

Financial market participants help the European economy transition towards a greener, more resilient and circular system, by incorporating Environmental, Social and Governance (ESG) factors:

  • into advisory activities to end investors, by asking about their sustainability preferences;
  • into the design or selection of a portfolio of financial assets;
  • into the transparent disclosure and reliable explanation of their decision-making process;
  • into the pre-contractual ex-ante information on integrating risks and their expected impact;
  • into the periodical reports by stating the overall sustainability-related impact

The EESC

  • supports that the starting point is to gradually define – using rigorous scientific evidence – which activities are sustainable;
  • finds that right from the outset, with the environmental criteria, the social safeguards agreed at international level must be respected, as well as the European Pillar of Social Rights;
  • demands that safeguards should continue right to the governance aspect;
  • highlights the need to ensure the involvement of civil society and the social partners at every stage of the process;
  • firmly believes in designing sustainable pan-European financial products.