Effective ESG reporting and disclosure requires a set of criteria and objectives which are aligned with overall business operations and/or investment strategies. This makes it very important to identify and engage key stakeholders throughout the disclosure process.
Mandatory disclosure and reporting carry several possible implications – as stakeholders recognise the potential impacts on the business, they are likely to drive a major review of business models, processes, and policies which respond to stricter regulations.
An example of mandatory regulation which is likely to affect companies disclosing ESG information is the Sustainability Finance Disclosure Regulation (SFDR), which requires financial market participants and financial advisers to make disclosures on the integration of sustainability risks and the consideration of adverse sustainability impacts in their processes and the provision of related information on financial products (including funds and pension products).
For asset managers seeking to ensure their funds comply with the latest regulations, Alter Domus assists clients with performing the categorisation under SFDR and EU Taxonomy as well as provide relevant disclosures to the pre-contractual agreement. Additionally, Alter Domus can assist with completion of the RTS templates and relevant disclosures to the pre-contractual agreement.