Recital 38

(38)Regulation (EU) 2019/2088 of the European Parliament and of the Council ²¹ lays down harmonised rules for financial market participants and financial advisers on transparency with regard to the integration of sustainability risks and the consideration of adverse sustainability impacts in their processes and the provision of sustainability-related information with regard to financial products. It is important to take a horizontal approach to transparency rules on sustainability for financial market participants and financial advisers. AIFs and UCITS can make an important contribution to the objectives of the capital markets union. The growth of the market for AIFs and UCITS also needs to be consistent with other objectives of the Union and should therefore be steered towards the promotion of sustainable growth. AIFMs and UCITS management companies should be able to demonstrate that they comply on an ongoing basis with their obligations under Regulation (EU) 2019/2088. Consequently, AIFMs and UCITS management companies should integrate environmental, social and governance (ESG) parameters into the governance and risk management rules used to support their investment decisions. AIFMs and UCITS management companies should also apply governance and risk management rules to their investment decisions and to their assessment of relevant risks, including environmental, social and governance risks. That is even more important where AIFMs and UCITS management companies make claims as to the sustainable investment policies of the AIFs and UCITS that they manage. Those investment decisions and risk assessments should be made in the best interests of the investors of the AIFs and UCITS. ESMA should update its guidelines on sound remuneration policies under Directives 2011/61/EU and 2009/65/EC as regards aligning incentives with ESG risks in remuneration policies.