FCA’s ESG Benchmarks Review Letter

Have you read the Financial Conduct Authority‘s “ESG Benchmarks Review” letter that they sent to benchmark administrators? 

Some key points from the letter:

➟ Administrators [of ESG benchmarks] must publish a benchmark statement …[that] should contain essential information to enable users to understand what a benchmark measures, its risks and ultimately allow users of benchmarks to make informed decisions when selecting a benchmark.

➟ It is important benchmark administrators provide good-quality disclosures so that users and end investors can assess the benchmark’s ESG claims.

➟ Benchmark administrators must provide specific information on how key elements of the methodology reflect ESG factors for each benchmark or family of benchmarks, considering the underlying assets on which the benchmark is based.

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