Nov. 24, 2022

ESG Regulation and Initiatives Outside of the U.S.

The SEC’s interest in environmental, social and governance (ESG) issues as they relate to corporate disclosures and private fund investment strategies is well documented. The CFTC has also expressed interest in climate-related financial risk relevant to the derivatives markets and the underlying commodities markets. U.S. regulators, however, are not alone in their interest in this area; in fact, the regulation of ESG-related issues in the investment management context has been driven by foreign regulators in many ways. For example, the E.U.’s Sustainable Finance Disclosure Regulation, which imposes new disclosure obligations for asset managers, took effect on March 10, 2021. In addition, some of the key ESG-related standards and frameworks for fund managers have been developed in a global context. Therefore, as the U.S. is celebrating Thanksgiving today, this issue of the Hedge Fund Law Report features five articles on ESG regulation and initiatives around the world. These articles present two global ESG standards and discuss the regulation of ESG in the E.U., Hong Kong and Luxembourg. We will resume regular biweekly publication on Thursday, December 8, 2022, and the issue will feature the second article in our series analyzing the comments submitted to the SEC on its proposed private fund reforms. See “Morgan Lewis Attorneys Discuss the Global ESG Landscape” (Aug. 19, 2021).