The impact of the EU sustainable finance disclosure regulation on Maltese investment funds

Abstract

Environmental, Social, and Governance (ESG) factors have become critical competitive features for businesses and investors in recent years. However, measuring how investment fund entities follow through with their ESG commitments has proven challenging for investors. The EU enacted the Sustainable Finance Disclosure Regulation (Regulation 2019/2088)2 to ensure ESG compliance and regulation. The Regulation entered into effect at the beginning of March 2021. The Sustainable Finance Disclosure Regulation enables investors to compare environmental, social, and governance – ESG – objectives of different financial products, gain insights into risks and opportunities, differentiate any sustainability issues, and capitalise on sustainable profits, thus facilitating the investors to make better-informed decisions. This thesis aims to analyse the implication of the SFDR in the Maltese financial system, taking particular importance in investment funds. Considering these circumstances, this dissertation seeks to present an appropriate answer to the question, “What is the Impact of the EU SFDR on the Maltese investment funds?”