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Private Funds and ESG: Investment, Reporting and Disclosure Issues; Industry Protocols

Recording of a 90-minute premium CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Wednesday, June 2, 2021

Recorded event now available

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This CLE course will examine evolving best practices regarding environmental, social, and governance (ESG) fund investment for asset managers. The panel will discuss ESG reporting and disclosure frameworks recently established by the EU, guidance from U.S. regulators, and ESG investment and reporting protocols currently employed in the investment community.


Asset managers increasingly focus on ESG considerations in their investment management operations. In response to investor demand, industry standards, and new EU regulations, ESG considerations now figure more prominently in investment strategies and ongoing reporting by funds.

To the extent asset managers claim that their investments are ESG-related, they must provide disclosures that allow retail investors to understand why fund investments qualify as ESG and explain the degree to which environmental or social impact is a priority in making investments. ESG asset managers must also have ongoing ownership and proxy voting policies consistent with recognized ESG principles.

The EU now requires asset managers of EU funds or having EU investors to disclose ESG considerations in their investment process. In the U.S., investors expect fund managers to identify the type of ESG data or ratings used to assess companies' ESG performance. Industry standards such as the Global Reporting Initiative (GRI) can be used to provide standardized ESG performance metrics that are widely accepted in the investment community.

In making ESG considerations part of the investment process, asset managers must implement a process for evaluating companies either through "negative screening" to avoid exposure to a particular activity (e.g., gambling or firearms) or "positive screening" to ensure a company satisfies a minimum ESG rating threshold. ESG ratings can be developed internally or by using one or more outside data providers.

Listen as our authoritative panel discusses the new emphasis on ESG and issues asset managers must consider when engaging in ESG investing.



  1. Emergence of ESG as a business model for investment funds
  2. Disclosure and reporting obligations for ESG funds
    1. New EU disclosure obligations: EU Non-Financial Reporting Directive (2014/95/EU)
    2. SEC risk alert
  3. Designing and implementing an ESG investment strategy
    1. Positive and negative screening
    2. Sources of ESG data on companies
  4. Engagement with portfolio companies: proxy voting


The panel will review these and other important issues:

  • What are an asset manager's disclosure obligations when marketing a fund as an ESG-oriented investment fund?
  • When might the new EU Non-Financial Reporting Directive (2014/95/EU) apply to a U.S.-based asset manager?
  • How should an asset manager evaluate the ESG performance of companies in which it looks to invest?
  • What are best practices for ongoing engagement with portfolio companies which have been designated as ESG investments?


Avdeychik, Vadim
Vadim Avdeychik

Of Counsel
Paul Hastings

Mr. Avdeychik counsels mutual funds, closed-end funds, exchange-traded funds, business development companies (BDCs),...  |  Read More

Franzese, Debra
Debra Franzese

Seward & Kissel

Ms. Franzese works with sponsors and managers of various private investment funds and other pooled investment vehicles,...  |  Read More

Poe, Alexandra
Alexandra Poe

Hughes Hubbard & Reed

Ms. Poe has over 25 years of experience in investment management practice, representing investment advisers and...  |  Read More

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