Legal and Compliance Challenges for Global Asset Managers From Disparate ESG Regulations in the U.S. and Europe

Just as climate change and other facets of the environmental, social and governance (ESG) regime are global matters, so too are the regulatory developments surrounding private fund investing in the area. As Europe is a first mover in the area, U.S. managers with ESG aspirations need to stay abreast of new regulations coming out of the E.U. and build in compliance practices accordingly. Those efforts will not only make their funds viable to European investors but also help keep fund managers ahead of queries and concerns from the SEC. Those were among the topics addressed by an expert panel at the Practising Law Institute’s Global Asset Management 2020 program, which explored themes and trends emerging for global asset managers since the pandemic, as well as regulatory developments in the U.S. and E.U. affecting ESG investing. The panel featured Julien Bourgeois, partner at Dechert, and Bruce Karpati, partner and global CCO at KKR. This article provides relevant takeaways from the presentation. For further commentary from Bourgeois, see “U.S. Treasury Initiates Survey of Foreign Securities Holdings” (Feb. 24, 2022); and from Karpati, see “OCIE Associate Director Outlines Coordinated Compliance Effort Under Trump Administration” (Oct. 19, 2017).

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