New research provides a legal framework for institutional investors internationally as they seek to address key environmental and social sustainability challenges, and sets out the opportunities for policy reform

21 July, LONDON - Freshfields Bruckhaus Deringer (Freshfields) has today released a new report, A Legal Framework for Impact, commissioned by The Generation Foundation, the United Nations-supported Principles for Responsible Investment (PRI), and the United Nations Environment Programme Finance Initiative (UNEP FI). The report provides the first ever comprehensive analysis of how far the law requires or permits investors to take deliberate steps to tackle sustainability challenges in discharging their duties, described as investing for sustainability impact.

Investors are increasingly focusing on the impact of their activities on the environment and society. This report brings much needed clarity and also looks at the opportunities for policy reform that would better enable investors to have coherence on the legal frameworks to invest sustainably. The jurisdictions covered are Australia, Brazil, Canada, China, the EU, France, Japan, Netherlands, South Africa, the United Kingdom and the United States.

The report, written by Freshfields, finds that, while there are differences across jurisdictions and investor groups, where investing for sustainability impact approaches can be effective in achieving an investor’s financial goals, the investor will likely be required to consider using them and act accordingly.

It 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.

As such, the report is expected to be the basis of a subsequent three-year programme by PRI, UNEP FI and The Generation Foundation. That work will focus on five key jurisdictions to help foster legal and regulatory environments that are equipped to meet global sustainability imperatives.

“If it was ever possible to approach the goal of earning a financial return in isolation from other valued goals, that time is not now. This report addresses a vital issue for investors at a time of pressing need to join in tackling humanity’s greatest challenges. It is the outcome of a unique global legal collaboration, and we are delighted to make it available to investors and the international community,” commented David Rouch and Juliane Hilf, the principal authors and partners at Freshfields Bruckhaus Deringer.“We are grateful for the support of our partner firms in jurisdictions where we don’t have a presence and could not have completed the report without their help.”

“This report is the first of its kind. This detailed legal analysis shows investors they should feel empowered to rethink old investment paradigms by considering risk, return and impact as the pillars of successful investment practice,” commented David Blood, Senior Partner, Generation Investment Management.

“This exciting new project reflects the growing momentum behind sustainable investing around the world, and it will be of great value to PRI signatories,”commented PRI CEO, Fiona Reynolds.“Freshfields have identified a diverse spectrum of actions that investors and policymakers could take to better facilitate investing for sustainable impact, and these are based on an extensive analysis of the unique legal and regulatory conditions they face in their respective jurisdictions.”

“We need an updated financial system that is fit for purpose”,commented Inger Andersen, Executive Director, United Nations Environment Programme. “At present, many leading responsible investors feel constrained by current financial and legal frameworks that were not originally designed to facilitate today’s sustainability goals. This revelatory report offers a new path forward, identifying the current law and modification options to support a transition from predominantly environmental, social and governance-integration to wide-spread investment for sustainability impact.”

Notes to editors

The report is the product not only of the Freshfields’ lawyers around the world but also those of the firm’s StrongerTogether network, a group of partner firms in jurisdictions where it does not have a physical presence.

Freshfields Bruckhaus Deringer is a global law firm with a long track record of successfully advising the world’s leading national and multinational corporations and financial institutions on ground-breaking and business-critical challenges. Our team of more than 2,800 lawyers and other legal professionals delivers global results from our 28 offices worldwide. Our commitment, local and multinational expertise and business know-how means our clients can rely on us when it matters most.

The Principles for Responsible Investment (PRI) works with its international network of signatories to put the six Principles for Responsible Investment into practice. Its goals are to understand the investment implications of ESG issues and to support signatories in integrating these issues into investment and ownership decisions. The six Principles were developed by investors and are supported by the United Nations. The PRI does not operate for its own profit; it engages with global policymakers but is not associated with any government; it is supported by, but not part of, the United Nations.

The Generation Foundation is a UK registered charity and was established alongside Generation Investment Management LLP, the sustainable investment firm founded in 2004. Our mission is to drive the urgent transition to an equitable society in which global temperature rises do not exceed 1.5⁰C. We operate a proactive grant-making and research programme that focuses on four priority areas: investor climate action; carbon pricing; gender inclusion and empowerment; and action on economic inequality. For further information, please visit

United Nations Environment Programme Finance Initiative (UNEP FI) is a partnership between UNEP and the global financial sector to mobilize private sector finance for sustainable development. UNEP FI works with more than 400 members – banks, insurers, and investors – and over 100 supporting institutions – to help create a financial sector that serves people and planet while delivering positive impacts. UNEP FI aims to inspire, inform and enable financial institutions to improve people’s quality of life without compromising that of future generations. By leveraging the UN’s role, UNEP FI accelerates sustainable finance.


Biruktawit Zelalem ([email protected] |720-470-6763)

Adel Raslan ([email protected] | +44 7515 085223) and Miranda Ward ([email protected])