29/10/20

UK: Government issues sustainable finance standards for fund managers.

As published on cityam.com, Wednesday 28 October, 2020.

The UK has issued a set of standards for asset managers within the sustainable investment sector as it shores up its green credentials.

Interest in environmental, social and governance-related investing has taken centre stage in recent years. Inflows into active ESG funds reached a record £392m in September, taking the quarterly total to £1bn, according to data from funds network Calastone.

Additionally, over the past three years, the amount raised in green bonds on the London Stock Exchange (LSE) has almost tripled, from £8bn in 2017 to £22.4bn this year.

In response to this interest, a variety of industry standards have emerged, but this is the first to be supported by the UK government, according to Reuters.

“Transforming our financial system for a greener future is crucial as we build back better from Covid-19 and to meet our legally binding target for net zero carbon commissions by 2050,” said Kwasi Kwarteng, minister of state for business, energy and clean growth.

The national standards body, the BSI, worked on the new set of standards alongside the Department for Business, Energy and Industrial Strategy, as well as representatives of the UK financial services industry.

The new voluntary UK standard sets out the requirements to establish, implement and manage the process of integrating responsibility and sustainability considerations into asset management, according to Reuters.

It comes amid a renewed commitment to the UK’s Green Finance strategy ahead of a fresh round of global climate talks.

The strategy, part of plans to strengthen Britain’s economic policy for balanced growth in line with climate change commitments, has seen the government pour investment into the low carbon economy.

Last week business secretary Alok Sharma called on allies to use the pandemic as an opportunity to reshape the global economy in line with sustainability goals.

“By investing now, to reduce our emissions, build resilience, and adapt to climate change, we can create jobs and generate growth,” Sharma said. “And at the same time, we can protect the planet for future generations.”