Briefing | Dec. 9, 2019

EU Investor Disclosure Regulation

New rules, which came into force in December 2019, require European investors such as banks, pension funds and insurers, to disclose their impacts on people and planet and to publish the action they are taking to prevent harms.

Our new briefing, co-authored with Action Aid, outlines practically what the rules mean, and how they can be implemented in a way that may be most effective for people and the planet.

These rules followed intense negotiations at EU level, which resulted in new obligations for investors to consider a broader set of risks to their investment activity than pure financial risk to their profits, and to assess and mitigate risks to human rights and our global environment.

Download the full policy briefing: EU's Regulation on Investor Disclosure on sustainability risks and due diligence (PDF, 2.7MB)

As part of these new rules, investors will now need to:

  • be transparent about the principal adverse impacts their investments have on people and planet;
  • publish details of their “due diligence” policies to make sure they can systematically identify, prevent and mitigate and account for those adverse impacts.

Whilst there are no reliable estimates of the global footprint of European investments, research by civil society organisations including Global Witness shows that investments by European based financial institutions can often have significant detrimental effects on climate change, human rights and deforestation - to name just a few.  

Now, not only will investors need to disclose the principal adverse impacts their investments have on people and planet, they will need to publish details of their “due diligence” policies to make sure they can systematically identify, prevent and mitigate and account for those adverse impacts. 

This briefing is intended to provide clarity on the impact of these rules and clearly outlines how under the new regulation investors must be able to identify whether the assets or companies they are investing in will have any negative impact on people and the planet and then mitigate that impact.

EU member states will have until May 2021 to fully implement these rules. We will be calling for speedy and robust implementation of these rules which are an essential part of efforts to reform the EU’s financial sector to make it truly sustainable. 

Download the full policy briefing: EU's Regulation on Investor Disclosure on sustainability risks and due diligence (PDF, 2.7MB)