Aligned and kicking? How to start an ESG fund that meets UK and EU climate standards

Considerations for fund integration

ESG concerns have long formed a part of certain sectors in asset management. What has changed recently is the seriousness with which governments, regulators and policy makers around the world over are treating those concerns.

A core tenet of EU policy is a conviction that financial market participants can help the transition to a low-carbon and more sustainable economy, deploying an interventionist approach to incentivise participants to make private capital available, robustly nudging but not forcing them in the ESG direction. As a result, the EU passed two significant ESG-related regulations: the Sustainability-Related Disclosure Regulation (SFDR) which came into effect on 10 March, and the Taxonomy Regulation (TR) which comes into effect in January 2022. The UK did not onshore either the SFDR or TR as p...