Submission | Sustainable Investment Product Labels
Summary Points.
Legal & Prudential supports the implementation of a sustainable investment product labelling regime.
It is important, however, to start with a clear and unambiguous distinction between the setting of sustainability related investment objectives and the use of sustainability related themes for economic risk analysis.
In our submission to the Federal Government’s consultation, we recommend that:
Labelling obligations should be mandatory for all financial products with an investment component, where the investment objectives go beyond a risk/return objective;
No new prescriptive record keeping obligations, while retaining the existing principles-based evidentiary obligations;
Guidance should be provided indicating the general suitability of Responsible Investment Approaches towards the different sustainable investment product labels; and
The use of prescribed sustainability product labels be restricted to products that are managed in alignment with the definitions of the labels.