The ESG regulation race is on

IF YOU are struggling to keep up with all the environment, social and governance (ESG) regulations that are emerging around the world, you are not alone. The volume of new rules may feel overwhelming or even intimidating. It helps to remember what they try to do: make sure that the investments we need to get our economies to a more sustainable place, really happen.

In many cases, this starts from a country's net-zero emissions goal, which is going to be very expensive to achieve. At a time when governments face Covid-related mountains of public debt, the pressure falls on private investors. This is what "sustainable finance" is about.

Policymakers have a long list of things on their agendas but invariably target 3 areas: company disclosures to ensure investors have the necessary information to allocate capital investment product disclosures, so that people can easily identify which products are more likely to allocate capital to sustainable activities or activities that can make the journey to sustainability taxonomies, for the markets to have a common understanding of what "sustainable" is.