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Financial firms will have to collect information from retail investors on their environmental, social and governance (ESG) investing preferences, under proposals from European securities regulators.

The European Securities and Markets Authority (ESMA) launched a consultation on Thursday on proposed revisions to suitability requirements in the region, under its regulation known as the Markets in Financial Instruments Directive (MiFID II).

In particular, ESMA is consulting on a requirement for firms to gather information from clients on their preferences for sustainable investment products, and the extent to which they want to invest in these kinds of products.

After screening for suitable products, firms would be required to recommend products that meet clients’ sustainability preferences.

Additionally, firms would be obliged to provide their staff with training on sustainability topics and track clients’ sustainability preferences.

The regulator said the proposals follow revisions to the MiFID II rules, to “integrate sustainability factors, risk and preferences” into both organizational and operating requirements for investment firms.

There have been calls for similar action in Canada.

For instance, last year the Responsible Investment Association called on the Investment Industry Regulatory Organization of Canada (IIROC) to include sustainability considerations in its new guidance on know-your-client and suitability.

In response, IIROC amended its guidance, to require that dealers “provide their clients with the opportunity to express their investment needs and objectives in terms that are meaningful to them,” including ESG preferences.

ESMA’s proposals, which would go further by obliging firms to collect that information, are now out for comment until April 27. It plans to publish a final report on the subject in the third quarter.