BETTER FINANCE fully supports this proposal to include ESG considerations during the advisory and product suitability process. However, we have some concerns regarding the proposal.
Firstly, and as raised at several occasions by BETTER FINANCE, before requesting institutional investors and assets managers to include ESG’s client’s preferences in the advisory and product suitability process, we must have an internationally agreed taxonomy in order to determine, for instance, what is “green and what is not”.
The Commission has chosen to follow a sequencing approach by first focusing on climate only. However, the proposed amendment to the IDD delegated regulation includes the three components: “E”, “S” and “G”.
Secondly, we believe that the Commission should make a clearer reference between the proposed Regulation on disclosures relating to sustainable investments and suitability risks (Proposal COM (2018) 354) 354 and the advisory and product suitability process.