A Legal Framework for Impact: sustainability impact in investor decision-making

Authored by Freshfields Bruckhaus Deringer and commissioned by PRI, UNEP FI and The Generation Foundation, this report provides ground-breaking legal analysis on the extent to which legal frameworks enable investors to consider impact in their activities across 11 jurisdictions: the EU, Australia, Brazil, Canada, China, France, Japan, South Africa, the Netherlands, UK and the US. The report also provides an extensive suite of options for policymakers wishing to facilitate investing for sustainability impact, including changing investors’ legal duties and discretions, such as allowing the pursuit of sustainability goals as long as financial return goals are prioritised, and a presumption in favour of investor collaboration in tackling sustainability challenges.

European Union: Empowering investors to pursue sustainability goals

This paper provides an analysis of relevant EU rules, and policy recommendations to encourage a wider pursuit of environmental and social goals. Building on the findings of the LFI report relating to the EU, this paper sets out why legal changes are needed to enable mainstream investors to work towards sustainability impact goals.

Australia: Integrating sustainability goals across the investment industry

This paper explores the existing policy barriers and gaps in Australia that may limit institutional investors’ ability to pursue sustainability objectives, in the best financial interests of their beneficiaries and clients. It provides recommendations for policy and regulatory reforms that could help address these gaps and highlights two policy areas for further consideration.

UK: Integrating sustainability goals across the investment industry

This report examines relevant aspects of the UK legal and regulatory framework and identifies areas where guidance and policies are insufficiently clear, potentially limiting institutional investors’ willingness or ability to pursue sustainability impact goals. It then recommends policy measures that would empower investors both to consider sustainability factors and to pursue sustainability impact goals, in particular where these are relevant to financial returns.

Canada: Integrating sustainability goals across the investment industry

Building on the LFI report, this paper argues that policy changes are required if investors are to contribute fully to Canada’s long-term environmental and social sustainability. It examines the relevant aspects of the Canadian legal and regulatory framework and identify areas where more clarity and guidance are needed.

Japan: Integrating sustainability goals across the investment industry

This briefing clarifies the extent to which institutional investors in Japan are currently permitted or required to invest for sustainability impact. It then makes recommendations for Japanese policy makers that would empower and support investors to better integrate the consideration of sustainability impacts into their decision-making.

Legal framework for impact: Briefing for policy makers

This briefing for policymakers provides an overview of key legal findings of the report “A Legal Framework for Impact” and sets out what actions policymakers should take to enable greater pursuit of sustainability impact objectives by the investment sector.


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