DANIEL NEVZAT | Manager, Government Relations and Public Policy Practice, Norton Rose Fulbright LLP
IMOGEN GARNER | Partner, Financial Services Group, and Head, Buy-side Regulatory Practice, Norton Rose Fulbright LLP

There has been a shift in thinking among industry stakeholders, policymakers, and regulators alike towards viewing environmental, social and governance (ESG) issues as financial risks that can have a material impact on investment performance. This has resulted in legislative and regulatory changes in the U.K. and the E.U., seeking to clarify that ESG issues are financially material, which may in turn impact the interpretation of investment managers’ fiduciary duties, tortious and contractual duties, as well as their regulatory duties.

This article will discuss the duties of investment managers, consider how ESG issues interact with those duties, and explore how recent legislative and regulatory changes may impact the applicable legal liability regime.