SRPInsight FEATURE
SRP Europe 2022: putting a label on ESG ESG continues to be at the top of the industry’s agenda as issuers and distributors seek clarity around the new EU Taxonomy Regulation.
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he need for ESG labels, the creation of a functional framework and the need to avoid greenwashing are some of the priorities the structured products market must address to create gold standards for sustainable investing, according to panellists discussing ESG at the SRP Europe 2022 Conference held on 24 March. In the asset management industry, most people still identify traditional funds as the instrument carrying ESG quality but this has changed over the past few years, according to Thomas Wulf, secretary general at the European Structured Investment Products Association (Eusipa). “The underlying indices that were developed meant to capture a specific ESG exposure when looking at the components. The index manufacturing industry basically drove our industry towards ESG products,” said Wulf.
The problem is that the market has come to a situation where there is no clear rule set for what could be called sustainable. “We see something that could be expected at least in the European Union as the legislators say we will have to set a framework for ESG products in general,” said Wulf. “What happened afterwards, however, is an avalanche of regulations, which are tweaked towards funds in a way.” “The increasing regulations on ESG investing can lead to issues, notably as several interpretation between market players can exist,” according to Florent Vincent, ESG risk manager & regulatory expert at Société Générale CIB. Indeed, regulations aren’t clear yet in terms of ESG product labelling, especially for structured products. “Some of our distributors are asking questions about the
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