ESG moves into the spotlight for the Alternatives and the AWM industries
Along with digital transformation, another sea change has been coming in the form of ESG (Environment, Social, Governance) and Sustainable Finance, which are becoming increasingly vital for our clients.
Interest in this area has skyrocketed and COVID-19 has proved a catalyst as investors increasingly look to incorporate both financial and non-financial data into their portfolios. This has raised both enormous challenges as well as opportunities both in the Alternatives industry and the Asset & Wealth Management (AWM) industry.
Luxembourg is seizing the opportunities that ESG brings. The country is a leading international platform for sustainable finance, supporting a range of activities from responsible investment funds and blended finance to green bond listings and ESG fund labelling.
Over the last years, from a holistic perspective, the many new EU pressures – on both the regulatory and tax side – have heeded a period characterised by the lack of security for the Alternative and AWM players. With all the new rules and jurisprudence, fund managers need sound guidance from the local authorities.
The Alternatives industry is now directly targeted by laws and regulations that impose governance, investment and disclosure standards serving ESG goals, making sustainability a strategic matter on the same level as investment performance. On the other hand, the AWM industry walks down a similar road as investors continue to push the boundaries of ESG implementation into core processes and investment decisions.
Over the last year, PwC has hosted a number of ESG or Sustainable Finance events, including, in June 2020, PwC’s ESG week for Asset Management: How will ESG and sustainability transform traditional and alternative asset management?. In addition, the overwhelming success of the various ESG webinars, which took place from 12 to 14 May 2020 in the form of several interactive sessions, gave proof to the rising interest in topics related to the many ESG-related transformational challenges going forward in fund management and fund administration. One of the sessions focused specifically on Alternative Asset Management and tackled the question “How will businesses’ services, products and processes be transformed?”
More recently, we hosted the PwC Sustainable Finance Forum and in October, released its in depth global report on ESG: The growth opportunity of the century: are you ready for the ESG change?
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