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Archive » April 2026 » Sustainability preferences and financial interest of the client in the regulation of investment services

Sustainability preferences and financial interest of the client in the regulation of investment services

Sergio Gilotta
April 2026 - n. 4
Keywords: Banche, imprese di investimento, sostenibilità
Jel codes: G21, G24, G28, E22, Q01

There is an underlying tension between the client's financial interests and their sustainability preferences, but it is unlikely that retail clients are aware of this situation – and therefore of the fact that sustainable investment may result in lower returns or in risk-taking that is not compensated by higher expected returns. The reformed Eu regulatory framework governing investment services, while requiring banks and investment firms to collect their clients' sustainability preferences, fails to prescribe that clients be informed of this trade-off. It appears necessary, however, that when collecting such preferences, firms adequately inform clients of the costs and risks associated with sustainable investment.

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