The New ESG Framework: Disclosure Obligations Imposed On ESG Funds

Introduction

Disclosure to investors is a key cornerstone of the SDFR with a clear distinction being drawn between the information to be provided to investors of "ESG funds" and to investors in non-ESG funds. In this, the second in our series of client briefings on the implications of the ESG framework for fund management companies¹ and funds, we consider the types of disclosures which the ESAs have proposed be provided to investors and prospective investors of ESG funds and the implications for both the management company and the board of directors of the relevant fund arising from this².

While all EU funds and non-EU AIFs which are marketed within the EU will be required to update their prospectuses by 10 March 2021 to provide investors with information on how sustainability risks are taken into account in the investment-decision making process applicable to the relevant fund³, investors in ESG funds must be provided with significant additional information