The chapter assesses the extent of integration of sustainable finance into the MiFID II and the IDD investor protection frameworks. The chapter explains why retail investors do not always act upon their investment preferences and the role of the investment product distributor in remedying investors’ value-action gap. The chapter discusses the main changes to the MiFID II and IDD frameworks by analysing the new sustainability-related definitions, the amended product suitability assessment, the amended product governance process, and the amended conflicts of interest procedure. The analysis argues that full cross-sectional consistency will not be achieved in the EU investor protection framework as only the MiFID II and IDD frameworks have been amended while rules covering other product distributors remain the same. It also highlights the problems of inconsistency caused by sustainable finance amendments to existing legislation, including when it comes to applying the definition of sustainability preferences, which refer to concepts of the Taxonomy Regulation and the Sustainable Finance Disclosure Regulation, and the lack of a complete Taxonomy covering social and governance perspectives in the amended MiFID II and IDD obligations.

This chapter analyses the EU Sustainable Finance Disclosure Regulation (SFDR) by proposing that we should think about the SFDR as a layered system of sustainability-related disclosures, which combine the concepts of “single materiality” and “double materiality”. The authors offer a new perspective on popular proposals to turn the SFDR into a labelling scheme but argue that supervisors should avoid such avenues. The chapter emphasises that it is not the definition of “sustainable investment” which is relevant, but the additional disclosure requirements that apply as soon as a financial market participant deems its financial product to be in line with the definition. The SFDR encourages robust internal assessments over blind reliance on opaque ESG rating agencies and provides financial market participants with the freedom to justify what a contribution to an environmental or social objective means. This freedom sets it apart from a labeling mechanism with a clearly defined threshold of what a contribution should entail. The chapter also analyzes proposed guidelines by ESMA for regulating the names of investment funds that involve sustainable investment, and concludes that those guidelines do not create a clear labelling regime.

The Taxonomy Regulation establishes common and science-based definitions to determine whether an economic activity is environmentally sustainable. It aims to make sustainable finance more accessible to investors, while also protecting them from false or misleading claims about a financial product’s sustainability. In doing so it shifts a large part of the burden to prevent greenwashing onto the legislator. This chapter therefore critically analyses the Taxonomy’s ability to protect investors from greenwashing and identifies a number of pitfalls. The market for sustainable financial products is rapidly growing, yet the Taxonomy so far only covers environmental sustainability in selected sectors. Gathering and disclosing the necessary environmental data can be challenging and costly and may discourage companies and financial market participants to offer Taxonomy-aligned products, possibly turning it into a niche product. The Taxonomy’s binary approach makes it difficult for investors to assess the sustainability of complex financial products and limits incentives for non-aligned companies to improve their performance. This chapter therefore argues for an extension of the Taxonomy that distinguishes between positive, intermediary and harmful activities and provides definitions for social and governance aspects of sustainability

The multi-faceted role of arbitrators is complex and protean. While there is consensus on the fact that the nature of the international arbitrator’s role entails according the arbitrator wide-ranging powers and that the arbitrator also undertakes a panoply of obligations, the scope of these powers and duties is not always well defined.Views about the nature and scope of these powers and duties might diverge depending on whether arbitrators are seen as service providers, justice purveyors, or both. Following a brief overview of this core question, the contribution proceeds to identify the sources of an arbitrator’s powers. Next, the most important duties of international arbitrators, including those pertaining to ethical obligations, the need to ensure due process, the necessity to apply the proper law, the duty to provide a reasoned award, and several others are explored. This contribution also highlights the most important rights of international arbitrators, such as the right to receive good faith cooperation from the parties, as well as the rights to remuneration and immunity, amongst others. Finally, we make some observations on ways in which the rights and duties entailed by the complex mandate of arbitrators can be reconciled in the event of conflict.