Sustainable Finance Update: BaFin will apply certain principles from the draft Guideline for Sustainable Investment Funds in Germany
5th May 2022
On 3 May 2022, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungen – “BaFin”) stated that it will now apply certain principles from the draft Guideline for Sustainable Investment Funds (the “draft Guideline”) in Germany, whilst not formally issuing it.
We understand that new sustainable financial products in Germany will be required to comply with the draft Guideline as it will now form part of BaFin’s administrative practice.
As a reminder, the draft Guideline contains specific requirements for the investment policy of domestic public investment funds that have a sustainability reference in their name (e.g., “ESG”; “sustainable ” or “green”) or are marketed explicitly as sustainable. At present, however, it is unclear which requirements BaFin will specifically apply in its administrative practice, which is aimed at preventing greenwashing.
Nonetheless, this will in practice create an uneven level playing field for foreign funds marketed in Germany and for domestic funds which will be required to comply with specific additional requirements.
Zeidler Group’s ESG Services Division remains at your disposal if you have any questions. Please get in touch with our ESG team for additional assistance on this matter.