Great Expectations: Is engagement living up to its promise?
Is ‘Engagement washing’ poised to be the next term maligning asset management’s ESG movement?
Sustainable finance initiatives, including investor disclosure, can play a limited but important role in mitigating the negative impacts of certain economic activities on our environment and society. The Sustainable Finance Disclosure Regulation (SFDR) has carved a new path by requiring ESG disclosure for asset managers. The investor community has developed further awareness around sustainability which is positive. That said, the SFDR has not addressed concerns of greenwashing and may, in some aspects, have worked against this goal. There is room to enhance this legislative framework to better enable investors to develop greater sophistication and investment managers to help finance the real-economy’s transition to net zero. PGIM1, a leading global asset manager, supports the European Commission’s efforts to seize this important opportunity for the SFDR to unlock its full potential.
In this paper, we explore:
- To label or not to label (that is the question!)
- Disclosure dystopia – how can we simplify?
- The critical components of a successful categorisation regime
1 PGIM is the global asset management business of Prudential Financial, Inc with $1.3T in AUM, 1,450+ investment professionals and 47 global offices. Our businesses have deep asset class expertise in fixed-income, liquid and illiquid alternatives and fundamental equity. PGIM has offices in 10 European countries, portfolio managers across the region and a broad European investor base.
ESG Investing
At PGIM we strive to embed ESG best practices throughout our investment, risk and talent management processes.
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