Posted on: December 7th, 2021
The first section is from the body of our newsletter sent today, the table below has additional links.
To my mind this really got started In March 2021 when Rishi Sunak, the Chancellor of the Exchequer, wrote to Nikhil Rathi, Chief Executive of the FCA notifying him and other financial regulators that ‘transitioning to an environmentally sustainable and resilient net zero economy was part of the country’s economic strategy’ indicating that climate change was now part of their remit.
More recent ‘major’ developments for UK financial services intermediaries include:
The Chancellor’s July Mansion House speech (‘A new chapter for financial services’) opened the door to new primary legislation, amongst other things saying: ‘We’re launching new requirements for businesses and financial products to disclose sustainability information…’.
The FCAs July ‘Dear Chair’ letter, with its ‘sustainable investment principles’ addendum sought to fix the foundations by saying how they expect the ESG and Sustainable investment fund market to operate, focusing on guiding principles around ‘design, delivery and disclosure’.
The FCA’s (July) business plan went further, saying they wanted to improve trust – and to encourage the delivery of high quality climate and sustainability related disclosures, increased stewardship, innovation, a market led transition to a more sustainable future and fund labelling – thereby flagging what was to come.
The government’s Green Finance roadmap, launched in October 2021, pointed to even wider ambition. It referenced the development of a UK green taxonomy, wider adoption of TCFD (climate change disclosures) and proposals to further explore sustainability related disclosures and fund labelling (including references to data and ratings). Financial advisers are briefly mentioned in this document (I wrote a piece for FT Adviser on this – linked here.)
COP26 saw the publication of the FCAs ‘Sustainability Disclosure Requirements (SDR) and investment labels’ discussion paper DP21/4 (please respond by 7 January, this is going to be important!)
COP26 also saw the announcement of the FCA’s paper ‘A strategy for positive change: our ESG priorities’ which gives ESG national and international context.
The FCA also published an updated climate change adaptation report
There has also been a huge amount of work going on internationally – notably at IOSCO (international standards) , with the creation of GFANZ (investor coalition) , ISSB, TCFD, FSB and beyond. The international context of all this is crucial – but too lengthy to cover here today!
So to summarise, expect sustainability to feature more significantly in your business activities going forward…
|Mark Manning FCA
|45 minute video – presented before COP26
|Greening Finance: a roadmap to sustainable investing
|Various – at COP26
|COP Blue Zone
|COP26 finance day, 3 hour video
|Guardian excerpts from COP26 speech
|2 mins – talking about rewiring the financial system
|A wide range of official COP 26 related videos
|FCA paper on SDR & labels
|Discussion paper – deadline January 22
|Barack Obama COP26 talk
|a superb summary of the issues
|Nikhil Rathi a strategy for positive change
|Net Zero financial centre fact sheet
|Summarising net zero financial centre announcement