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Sustainability and risk disclosure

Green_investmentsUntil the last few years it was commonly thought that adopting ESG criteria when making investment decisions involved the investor sacrificing financial return for the good of the planet.

But a myriad of studies over the past couple of years have shown not only that the adoption of ESG criteria can lead to comparable returns to non-ESG compliant funds – but that green funds often outperform them.

In this opinion piece published in the September edition of Funds Europe, Martin Mager of Linklaters Luxembourg says that some now think that risk disclosure is more necessary for non-ESG funds than ESG ones.

He also examines some of the legal implications of this change in investor appetite and looks at the forthcoming EU Taxonomy Regulation on Sustainable Investing.

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