the sustainable, responsible and ethical investment information hub
July 12th, 2021
[Please see my more recent ‘Principles’ blog as the FCA Sustainable Investment Principles are now live.]
As you will know, the focus on ‘ESG’ (environmental, social and governance) has ramped up dramatically recently right through the investment value chain. News is now emerging almost daily from all quarters – from the public facing NGOs (notably Make My Money Matter) through to the United Nations – via UK government departments and our regulators.
I do not claim to be able to keep tabs on everything (or to have fully digested every detail of every link below) . I do however aim to and am happy to share the list of developments I’ve been keeping tabs on recently. These will undoubtedly play a major part in helping to reshape the landscape in which we operate (although it is early days as most of the following has emerged within the last few weeks btw…):
International:
UK:
FCA:
Other FCA developments that we are aware of:
The FCA has been working on new principles for sustainable investment funds, to help improve trust in this area. These were first announced at our conference last year and are expected to be published shortly.
Other areas we know the FCA is considering is labelling of sustainable investment funds and templates for sustainable investment funds. We understand these to be at an earlier stage and do not know timescales.
TEXT ADDED 17 July 2021
Today’s FCA business plan makes multiple references to TCFD (p34) and ESG (p43).
The ESG section notes that the FCA wants to achieve the following outcomes:
• high-quality climate – and sustainability-related disclosures to support accurate market pricing, helping consumers choose sustainable investments and drive fair value
• promote trust and protect consumers from mis-leading marketing and disclosure around ESG-related products • regulated firms have governance arrangements for more complete and careful consideration of material ESG risks and opportunities
• active investor stewardship that positively influences companies’ sustainability strategies, supporting a market-led transition to a more sustainable future
• promote integrity in the market for ESG-labelled securities, supported by the growth of effective service providers – including providers of ESG data, ratings, assurance and verification service
• innovation in sustainable finance, making use of technology to bring about change and overcome industry-wide challenges
Other UK initiatives:
The BSI (British Standards Institute) is working on fund PAS 7342 . This is the first step in the process of designing a sustainable investment fund standard for the UK – and then hopefully internationally (ISO). (Backed by BEIS and industry).
Pensions:
UKSIF
FYI much of the work above has involved not for profit UKSIF – the UK Sustainable Investment and Finance association – to some extent. I remain proud to be a director of UKSIF and to recommend them to interested parties.
A particular highlight for UKSIF recently was their appointment to the newly formed Green Taxonomy Technical Advisory Group (GTAG) on 6 June. The press release is available here.
A video recording of the 60 minute presentation M&G climate fund manager Randeep Somel, CFA and I gave earlier this week is now available on the M&G Wealth Platform (previously Ascentric). My main task was to introduce the impact investment fund spectrum – the similarities and differences between funds that focus on generating positive impacts as […]
A similar version of the following text was first published in our March 2022 newsletter. FCA Disclosures and labels (DLAG) – my involvement with the FCA, on their Disclosures and Labelling Advisory Group is proving both interesting and tough. We have had many meetings and the level of engagement has been impressive – but […]
A big thank you to our friends at Investment Life and Pensions Moneyfacts for publishing – and putting on the front cover – my latest piece on sustainable investment. You can download a pdf of the text here: 16-17 Purpose, Positioning and Priorities The text – as submitted – is below. Sent to Investment […]