Forum Nachhaltige Geldanlagen
FNG
Forum Nachhaltige Geldanlagen (FNG), founded in 2001, is the industry association promoting sustainable investment in Germany, Austria and Switzerland.
ID: 773898429623-54
Lobbying Activity
Response to Institutional investors' and asset managers' duties regarding sustainability
21 Jun 2018
With reference to the additional input of our umbrella organisation Eurosif the Forum Nachhaltige Geldanlagen (FNG) is pleased to submit its input.
FNG welcomes the mandatory integration and documentation of customer preferences on sustainability and their implementation in the client advisory process in the financial and insurance industry. FNG has been calling for many years for a mandatory "sustainability question" in customer advice and its appropriate consideration in the documentation of the advisory conversation.
- A mandatory query of customer preferences and attitudes towards sustainability is a decisive step in raising the awareness for sustainable investments. This will increase customer demand for sustainable products and for relevant training of financial advisors. In the medium term this will lead to a decisive increase of awareness of sustainability issues and to market growth. The systematic discussion of sustainability criteria in investment advice promotes awareness of the potential of financial products for sustainable development goals (SDGs) and could help accelerate the achievement of the SDGs and bring the market for sustainable investments from the niche into the mainstream.
- In this context, the expected EU clarification on the extent of the integration of ESG factors into fiduciary and investor duties will be important. In the FNG’s point of view, fiduciary duties have great potential to support sustainable investments. For example in Germany, the BVI – the German Association for Investment and Asset Management already included ESG factors in its guiding principles.
- Private investors and investment advisors can rely on existing and established instruments when choosing sustainable financial products: The FNG-Label for sustainable mutual funds (since 2015) and the FNG sustainability profiles (since 2012) are essential instruments in achieving a more in-depth market transparency and could be used more in the client advisory process. In this regard the increased disclosure requirements for asset managers and asset owners, as mentioned in the EU Action Plan are also of great importance. Together with its umbrella association Eurosif the FNG has already developed a relevant tool – the European Transparency Code (since 2008). The transparency code already has a large market share in the EU.
FNG recommendations:
- Clients should be asked for their motives (for example promotion of sustainability in specific segments, exclusion of controversial economic areas or influencing through active engagement at shareholder meetings) and their therefore preferred investment strategy (Sustainable and Responsible Investing Strategies (SRI). SRI options include: exclusion, norm-based screening, best-in-class, sustainable thematic fonds, impact investing, engagement, exercise of voting rights, ESG integration.
- In light of the two degree objective and the sustainable development goals it is urgent to prioritize the climate objectives. However, the social and governance dimensions of sustainability should not be neglected. The FNG label for sustainable investment and the FNG sustainability profiles provide an analysis of all three dimensions of sustainability.
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