The EU Asset Managers’ Run for Green

The growing sense of urgency around environmental, social and governance (ESG), especially in the “E” field, has placed these issues on the top of (mostly) everyone’s agenda. Society’s awareness and concern with these topics are clearly increasing. The reputable EU asset management regime, especially investment funds, will benefit from the European lawmakers steady actions to foster their role in the field of ESG. Investment funds represent one of the institutional investors with greater growth and may play a crucial role in the search for green. This chapter discusses the compatibility of ESG factors and investment with the managers’ fiduciary duty, identifying the European investment fund governance valuable role in the fiduciary relationship and making the investment funds especially relevant in the ESG field, reinforced by the double materiality. This context sets the European investment funds as the most suited towards ESG implementation, even if it’s done on a mandatory basis. This chapter will also reflect upon the legislation under preparation at the EU level that rightly reflects the importance of ESG factors in the investment decision process and relevantly contributes to the EU asset management leading role, including in the run for green. In particular, this chapter argues that under the disclosure and taxonomy regimes the options taken by the European authorities may delay the run for green, because there are still missing pieces in the European framework, such as the ESG harmonized ratings and metrics.