BVI calls on Commission to exempt asset managers from sustainability reporting

German fund industry association BVI is calling on the European Commission to exempt asset managers from sustainability reporting on clients’ assets and their consideration for the purpose of materiality assessment, as part of the “omnibus simplification package”.

According to the BVI, the Commission should make clear that “for the time being, due to legal uncertainties”, sustainability reporting on assets managed on behalf of clients by asset managers is not required.

The double materiality assessment process, and specific reporting requirements part of the Corporate Sustainability Reporting Directive (CSRD), are far too extensive and unnecessarily burdensome, the association has said.

BVI has asked the Commission to urgently clarify how asset managers should treat assets invested on behalf of their clients, and is recommending that the Commission develop sector-specific guidance, and not reporting requirements, to simplify the sustainability reporting process.

Sector-specific guidance would explain how European Sustainability Reporting Standards (ESRS) apply to the asset management industry, and could avoid “duplicative reporting obligations” on managed assets under the CSRD and the Sustainable Financial Disclosure Regulation (SFDR), BVI added.

It underlined that asset managers face legal uncertainty with regard to the obligation to adopt transition plans under the Corporate Sustainability Due Diligence Directive (CS3D).

Therefore, it is necessary that the Commission clarifies that the duty to adopt a transition plan for climate change mitigation applies to the business activities of asset managers as companies and not to assets managed on behalf of investors – or it affects them only in case investors choose to adopt climate transition strategies, it added.

The clarification is necessary to ensure that asset managers in Europe continue to pursue investment opportunities on a global scale, BVI said.

The association is also asking the Commission not to proceed, as required in the CS3D, to assess whether additional due diligence requirements should be introduced for asset managers concerning the financial services they provide or their own investment activities.

“We [want to] rely on effective sustainability rules. Only a combination of industrial policy and sustainability reporting can enable the transformation of the European economy, and secure its competitiveness in the future,” said Kao Schulze, BVI’s head of Berlin, in a LinkedIn post.

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