Within the Irish funds space, ESG and SFDR remains at the forefront for senior Compliance & Risk professionals as we enter 2023. As of January 1st, 2023, the EU’s Sustainable Finance Disclosures Regulation (SFDR)** will enter its Level 2 phase. Simply put, while previously organisations had the opportunity to explain why they are not yet complying, Level 2 will introduce the mandatory implementation of reporting templates. The new requirements will mean that Irish investment funds must make extensive updates to their fund documentation and provide more in-depth sustainability disclosure amendments to their pre-contractual documents.
CBI’s Commitments to ESG
At the recent Irish Funds UK Symposium, Derville Rowland, Deputy Governor of the Central Bank of Ireland, stated that the CBI remain committed to supporting the growth of Environmental, Social and Governance (ESG) investments in Ireland. The Deputy Governor highlighted the significant investment in sustainable projects needed to support the transition to carbon neutrality and when turning her attention to SFDR Level 2, she noted that the CBI’s tolerance for any disclosures that do not meet the requirements will be low considering the length of time industry has now had to comply with these key regulatory changes.
We have already seen the implementation of SFDR creating multiple opportunities within the Irish market. Looking forward to 2023, Irish investment funds will need to assess their hiring requirements to focus on attracting well-equipped compliance & risk professionals, who have already gained experience/knowledge with SFDR regulations.
UK Implementation Delay; a Risk to our Talent?
Moving forward, we expect the UK will have a close eye on the Irish and European SFDR developments as they have chosen not to onshore SFDR. Although they have a track record of being an early mover in terms of regulation, the UK have decided to take an observative approach on SFDR and have chosen to proceed with their own clamp down on greenwashing through CP22/20 – Sustainability Disclosure Requirements (SDR), which will affect FCA regulated firms. As this will take effect post-SFDR, there is always a risk that UK companies may look to the Irish market for suitable talent who have already been involved in its implementation. In the interim, this as an excellent opportunity for those looking to take the next step in their career into a growing space and those who have paired practical experience with additional studies in sustainability have already seen a rise in demand.
SFDR is an EU regulation that sets out environmental, social, and governance disclosure requirements for financial market participants active within the European Union.
If you are interested in learning more about live opportunities, or you would like to discuss how we can support your hiring processes in the current market, please get in touch with Evan McNeice, Consultant for Compliance & Risk.