ESG commitment eludes majority of UK financial services
Only 20% of those working in the UK financial services profession are confident that their firms are committed to ethical finance policies and ESG principles when it comes to their lending, investing, wealth management and fund management activities, according to a new survey by the Chartered Institute for Securities & Investment (CISI).
The CISI, the not-for-profit chartered professional body for those working in capital markets, wealth management and financial planning, undertook the survey 6 October – 17 December 2020.
Against the background of the United Nations Environment Programme Finance Initiative (UNEPFI), which is working with the global banking community to increase lending that supports socially and environmentally sustainable economic activities, survey respondents were asked: “How confident are you that your firm is committed to the adoption and execution of ethical finance policies and ESG principles as regards lending, investing, wealth management and fund management activities?”
Of the 563 respondents, 20% said they were “confident”, 10% said they were “neutral”, with 70% declaring they were “not confident”.
Comments from those who said they were “confident” included:
“We have a large project underway at Group level to deliver ESG products and services as soon as possible. “
“We are working on ESG versions of all our Model Portfolios.”
Other comments included:
“Traction with senior management proving challenging.”
“The owner of the business I now work for is sceptical over new funds being guided to a more ESG investment stance, he argues that even government bonds are not ethical as most governments invest in arms, Nuclear power and weapons.”
“American firm, overall not a good attitude to anything other than making money, mental health, charity, social, environment all not important.”
“Poor data declaration by investment companies, especially in the small market cap and emerging markets sectors makes these goals almost impossible for small asset managers.”
“Too many ESG rating agencies… needs to be regulated as credit agencies currently are.”
Simon Culhane, Chartered FCSI, CISI CEO said:”Climate related risks and the deterioration of the world’s natural capital assets are the most significant issues of our time. Support across firms for ESG and ethical finance is therefore critical for future sustainability and stewardship of our world. Our survey shows that some firms are making good progress but we still have a long way to go as a profession to prove our ESG credentials.
“ESG assets were reported last year to have out-performed their peers across major equity markets. However, the recent Common Wealth report found a third of low-carbon funds were investing in oil and gas. As one of our survey respondents has noted, we now need a universally agreed benchmark, common set of standards and ratings across the ESG universe which will ultimately provide the confidence and trust investors need to further support this rapidly expanding and important ethical finance area.”