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Its a cultural thing.

March 15th, 2018

iStock_000014071214XSmallThe FCA issued a discussion paper today on ‘Transforming Culture in Financial Services’ – DP18/2.

I have written and spoken on this topic many times – as I too believe that retail financial services would benefit from a  cultural shift.

My concern is that the financial services system as it stands is not particularly conducive to recognising the importance of where we invest – or to factoring in many of the things that individual investors care about. 

A cultural shift that encourages us to focus more on such things would, in my view, benefit the financial services community, its clients and the planet. 

In response to the welcome, interesting  – but not SRI friendly – FCA paper, I put the following – necessarily brief – comments on social media this afternoon.

“The Financial Services cultural shifts I want to see are:

1. Recogise that it matters where we invest. We can consider growing areas like green finance, sustainability & social impact or we can ignore them – and wonder why trust, reputation & business suffer.

2. Shift the FCA’s view of ‘sustainable growth’ to include environmental/ESG as well as ‘financial’ factors. It is not ‘either/or’.

3. Update financial advice processes to ensure clients’ personal values and views on areas like climate change are always considered.”

I would welcome hearing the opinions of people who both agree and disagree with me.

My fear is that the retail Financial Services community is increasingly looking like the (eco) laggards of the investment world.

I of course have no enthusiasm for either unnecessary legislation or encouraging anyone to direct clients towards inappropriate investments … but if the Investment Association figures are right and only 1.2% of retail investors invest in ‘sustainable and ethical’ options something is not right!

Surely more than 1.2% of people are interested in sustainability, green finance, climate risk, social issues and ethics? (Doesn’t pretty much everyone have opinions – to varying degrees?)  And as we know there are many excellent and diverse Sustainable and Responsible Investment options available today.

What do you think?

And what can we sensibly do to address this, beyond supplying lots of free to use ‘whole of market’ fund information (complete with ‘labels’) via www.FundEcoMarket.co.uk?

The issues covered by SRI funds and financial services culture both represent major challenges – as well as substantial opportunities, so if we can use one stone to crack two nuts so much the better!

As ever, I am contactable via: Julia@sriServices.co.uk   or Twitter @JuliaDreblow

 

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