EC fires starting gun on development of ESG integration rules (IPE)

The European Commission has asked two of the EU’s financial supervisory bodies for technical advice on potential amendments to EU rules to require the integration of sustainability risks in investment decision-making.

The advice is being sought in relation to so-called delegated acts that would amend or introduce new rules under EU legislation addressing asset managers, insurers, insurance distributors and investment advisers.

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If accepted these rule changes would “explicitly require the integration of sustainability risks, i.e environmental, social and governance risks in the investment decision or advisory processes”.

The Commission also said the supervisory authorities should be aware that a delegated act could be adopted under IORP II, the recently revised EU pension fund directive, “once and if the related empowerment […] is in place”.