25 Jul US anti-ESG movement could accelerate UK plans for stricter regulations, investment expert shares
Following growing scepticism around ESG investments from parts of the Republican party in the United States, investors in the UK have raised concerns over its potential effect on Britain’s progress in this arena. As a result, the UK Sustainable Investment and Finance Association (UKSIF) – representing the nation’s biggest financial institutions including Barclays and JP Morgan – has urged the UK government to provide clearer guidelines around the role of fiduciary responsibility in ESG considerations. Following a PWC survey revealing that 74% of investors cite the management of ESG risks and opportunities as a critical factor in their decision making, Reece Tomlinson, investment expert and CEO of Saône Capital, the UK’s first trans-led impact investment advisory, is available to comment on the importance of fulfilling social duty through considerations into ESG investment.
Tomlinson explains that ESG considerations are an essential part of fulfilling one’s fiduciary duty, as it helps businesses both manage risks and identify investment opportunities. In line with this, the UK government’s support is necessary to establish consistent standards, minimise liability risks, and encourage responsible investing practices across the industry. The introduction of more transparent regulations could also fuel the continued growth of the impact investment sector, based on research from EY and the Impact Investing Institute,revealing 90% of participants have expressed their intention to boost allocation into impact investment in the next five years, with approximately 75% planning to raise their allocation by over 10%.
Amidst growing climate transition plans, investors are also seeking government support when addressing ESG concerns around limiting risks. This comes as just 50% of UK investors believe that board directors have sufficient knowledge in ESG issues faced by their company, according to the same research from EY. Tomlinson states the importance of enlisting an in-house function that can effectively manage and analyse ESG-related data, particularly as the nation gears up for more rigorous measures of ESG reporting.
