Asian investors need to prep for EU's new ESG challenge

Sustainable Finance Disclosure Regulation aims to standardise sustainability disclosures and prevent "greenwashing", and it will also affect non-EU financial market participants

Michelle Quah

Published Fri, Apr 16, 2021 · 05:50 AM

ESG

Singapore

THE European Union (EU) implemented its Sustainable Finance Disclosure Regulation (SFDR) last month, imposing new disclosure standards on financial institutions operating within the EU.

But financial market participants elsewhere in the world - including those in Asia - need to take note: the new rules are going to affect them as well, and they need to be prepared sooner rather than later.

This wave of regulatory change is also going to drive developments, not just from the bottom up, but also from the top down, in Asia - with Singapore likely leading the charge in this region.

The SFDR is the EU's attempt to standardise sustainability disclosures and prevent "greenwashing", which occurs when an entity tri…