Investors

Institutional investors

To date, institutional investors have the highest potential in terms of sustainable investing and provide the largest contribution to the growing demand for sustainable financial products and services.

The regulator targets the further inclusion of sustainability factors and risks in the investment process of institutional investors and the disclosure of such information to the end-investors.

The main strategic decisions for institutional investors are therefore related to:

deciding on pursuing sustainability objectives

defining an appropriate responsible investment strategy and finding the right balance between financial objectives and impact orientation.

Practical challenges for institutional investors (not exhaustive):

Strategy

Definition of own “Responsible Investment Strategy”
Definition of “Responsible Investment Strategy” in accordance with the preferences of the end-investors (beneficiaries)
Definition of clear ESG targets

Disclosures

Evaluation of disclosures and pre-trade documents provided (w.r.g.t. products)
Disclose how investments relate to the defined ESG targets
Investment managers - disclose ex-post periodically how ESG targets were reached

Processes

Provision of ESG preferences when compiling the investment objectives section of the suitability questionnaire
Integration of ESG-criteria into the investment decision making process

People & Organisation

Upskilling of all affected employees (incl. Management)
Need for SF / ESG specialists
Policy review and update

IT & Data

Implementation of control systems to monitor portfolio composition with regards to ESG-targets
Obtain ESG-information from data providers and incorporate in current data flow

Retail investors

In order to foster sustainable investment and in line with the upcoming regulatory requirements, retail investors will also be asked to disclose their ESG preferences as part of the suitability assessment carried out by financial instrument distributors and need to define their personal sustainable investment objectives. For this reason, retail investors should develop a good understanding of the current investment needs in order to define their own sustainable investment objectives and interpret ESG-data accordingly.

Contact us

Olivier Carré

Markets and Strategy Financial Services Leader, PwC Luxembourg

Tel: +352 49 48 48 4174

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Nathalie Dogniez

Sustainable Finance Leader, PwC Luxembourg

Tel: +352 49 48 48 2040

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Jörg Ackermann

Partner, Financial Services Consulting, PwC Luxembourg

Tel: +352 49 48 48 4131

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