Product Manufacturers

The impacts for manufacturers of financial products are spreading through the full value chain.

The regulator targets the inclusion of ESG-criteria in the investment approach. This will require fund managers (UCITS & AIF) to re-design their investment process and to gather additional data on their investment targets. 

As such, the strategic business decisions for a manufacturer are limited to: 

  • not adopting sustainable investment strategies or 

  • to ringfence the new approach (i.e. limited number of dedicated products) or 

  • to include the sustainability criteria as a baseline in all its portfolios and investment strategies.

sustainable finance for manufacturers

Whatever the choice, all these changes will be subject to disclosure requirements starting March 2021 and subject to minimum technical criteria which define environmentally sustainable business activities, starting 2022/2023 (i.e. Taxonomy).

Practical challenges for manufacturers (not exhaustive):

Strategy

  • Definition of a “Sustainability Strategy” for the investment process and the firm at large

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Disclosures

  • Website: Disclosure of certain elements of the sustainability strategy

 

  • Pre-contractual:
    • Disclosure of certain elements of the sustainability strategy
    • Disclosure requirements w.r.t. Products (UCITS & AIFs)

 

  • Periodic disclosures: Disclosure requirements w.r.t. Products (UCITS & AIFs)

  • ESG product labelling

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Processes

  • Incorporation of sustainability factors in the  investment due diligence  process

  • Implementation of the EU Taxonomy and the related technical screening criteria in order to determine which activities can be considered environmentally sustainable

  • Inclusion of ESG criteria in the manufacturer target market for the manufactured financial instruments

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People & Organisation

  • Upskilling of all affected employees (incl. Management)

  • Need for SF / ESG specialists 

  • Policy review and update

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IT & Data

  • Responsible investing requires information on sustainability factors in the form of data that needs to be available in the IT systems

  • Selection of adequate data sources

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Contact us

Olivier Carré

Markets and Strategy Financial Services Leader, PwC Luxembourg

Tel: +352 49 48 48 4174

Nathalie Dogniez

Sustainable Finance Leader, PwC Luxembourg

Tel: +352 49 48 48 2040

Jörg Ackermann

Partner, Financial Services Consulting, PwC Luxembourg

Tel: +352 49 48 48 4131