UKSIF has welcomed Sir Keir Starmer’s recognition of the role that private investment can play in helping the UK decarbonise its energy sector.

UKSIF is the leading membership body for sustainable finance in the UK, with over 300 members managing round £19tn in global assets under management.

James Alexander, Chief Executive of UKSIF, said:

“We welcome Labour’s recognition of the vital role that private investment can play in helping to decarbonise the UK’s energy sector and reach its net zero ambitions, catalysed by government action.

“We urge Labour to hold firm on its commitment on £28bn of green investment annually by the second half of the next parliament, as well as its proposed reforms to the planning system.

“Targeted government investment, combined with supply-side reforms, is key to unlocking greater levels of private capital to accelerate green growth across the UK.”

UKSIF has welcomed the launch of the Global Sustainable Investment Alliance’s 2022 Global Sustainable Investment Review, which has found $30.3 trillion is invested globally in sustainable investing assets.

The report also showcases a maturing of the industry, which includes the adoption of tighter definitions of when a fund can be described as ‘sustainable’.

GSIA Chair and UKSIF Chief Executive, James Alexander, said:

“The global sustainable finance industry is continuing to mature, with the introduction of clearer disclosure and labelling regimes – such as the EU’s SFDR, the UK’s SDR, and the SEC’s proposed Climate Disclosure Rule – helping drive forward our collective understanding of sustainable investment approaches and providing clarity over how sustainable investments are defined.

“But much more can be done to accelerate the transition to a sustainable future. That is why, for the first time, GSIA has made a series of policy recommendations in the GSIR – covering measures to increase investment opportunities in the net-zero transition, the need for closer global alignment on sustainable finance regulations, enhanced data sharing, and a sharper focus on disclosure of nature and biodiversity risks and opportunities.

“With the right actions and support from policymakers around the world, the global finance industry can play a prominent role in helping bring about positive change in the years to come.”

The GSIR 2022 report, which is sponsored by HSBC Global Research, can be downloaded from the GSIA website using this link.

UK Sustainable Investment and Finance Association (UKSIF) Chief Executive, James Alexander, has welcomed the FCA’s policy statement on its Sustainability Disclosure Requirements (SDR) and investment labels regime.

UKSIF is the leading membership body for sustainable finance in the UK, representing over 300 members managing £19tn in global assets under management.

UKSIF Chief Executive, James Alexander, said:

“This is an important moment in our industry’s efforts to build greater confidence and trust among retail investors in the UK’s evolving sustainable investing market. We believe that the new investment labels can address concerns often raised by savers over their funds’ sustainability claims and profile.

“We are pleased to see a number of important revisions to the regime to address potential implementation challenges and promote greater transparency for savers. These include refining some of the underlying criteria for the labels and the operation of the marketing rules, as well as direct recognition of the important role of multi-asset funds and blended strategies under the regime.

“Going forward, we would like to see the FCA consider convening the Disclosures and Labels Advisory Group (DLAG), or a similar industry group, on an ongoing basis to help the regime’s implementation in the market and monitor greenwashing risks. Crucially, the regulator should continue to closely engage with regulatory authorities in overseas markets to positively shape jurisdictions’ approaches to disclosures and fund labels and promote international harmonisation.”

Following today’s Autumn Statement, the UK Sustainable Investment and Finance Association (UKSIF) has called on the Chancellor to set out a more comprehensive response to the US Inflation Reduction Act, the EU’s Green Deal Industrial Plan, and other similar initiatives.

UKSIF Chief Executive, James Alexander, said:

“We welcome the Chancellor’s plans to speed up grid connectivity and reform planning for renewable energy projects, which could reduce some of the burdens holding back private investment into the low-carbon economy, although it remains to be seen how effective these will be in practice.

“The size and scale of commitments made today still fall short of a sufficiently comprehensive response to the U.S Inflation Reduction Act, the EU’s Green Deal Industrial Plan, and similar initiatives in other jurisdictions.

“If the UK is to attract the capital needed to lead the global transition to a more sustainable future, creating jobs and economic prosperity, we must build investor confidence, address greenwashing risks, and tackle more of the UK’s underlying investment barriers. The Chancellor didn’t go far enough.”

The UK Sustainable Investment and Finance Association (UKSIF), which represents 300+ members managing over £19tn in global assets under management (AUM), has expressed disappointment at the announcement of new licensing rounds for North Sea oil and gas.

UKSIF Chief Executive, James Alexander, said:

“We are extremely disappointed by the announcement of new licensing rounds for North Sea oil and gas, which the government has claimed will be compatible with our net zero ambitions – without providing evidence for how that can be the case.

“It is equally unclear how these new developments will help promote the country’s energy security – as the International Energy Agency (IEA) has recently said, there is no need for new upstream oil and gas projects to meet the world’s declining future fossil fuel demand by 2050.

“With clear and stable policy, the UK can unlock greater investment in the renewable energy transition and with it deliver good jobs, cleaner power, and lower energy bills. We want to see the government ensure that the UK remains a leader in driving the transition.”

New York City – 1 November 2023 CFA Institute, the Global Sustainable Investment Alliance (GSIA), and Principles for Responsible Investment (PRI) have issued a new resource that aims to bring greater understanding and consistency to terminology used in responsible investment, specifically:

• Screening
• ESG integration
• Thematic investing
• Stewardship
• Impact investing

For each term, CFA Institute, GSIA, and PRI have outlined a definition, detailed explanation, a list of definitions that served as the primary inputs, and guidance for using the terms in practice. The paper is intended for investors, regulators, policymakers, and other market participants.

The collaboration was inspired by calls from regulators for voluntary standard setters to develop common terms and definitions to ensure consistency throughout the global asset management and wealth management industries.

Promoting the consistent and precise use of terminology contributes to efforts to address greenwashing.

The work to harmonize terminology also serves to deepen understanding of the nuances of responsible investment approaches. It counters confusion about what different responsible investment strategies seek to achieve by clearly differentiating the objectives of approaches, such as ESG integration and impact investing.

The harmonized terminology contained in the joint resource responds to shifts that have taken place in the responsible investment landscape. Prior versions of the definitions were, in some cases, specific to investments in listed companies. These updated definitions reflect the reality that responsible investment approaches can be applied to a wide range of investment styles and asset classes, spanning both public and private markets.

The three organizations emphasize that this resource clarifies and harmonizes existing terms and definitions and does not create new terms or meanings.

Marg Franklin, President and CEO at CFA Institute, comments:

“Technical terminology is an important part of professional practice.  New terms are always emerging alongside new ideas, and definitions evolve over time.  It’s important to standardize terms and definitions as practices mature so that professionals can communicate efficiently and effectively with each other as well as with clients, regulators, and other market participants. We believe this work will serve as a valuable resource for CFA charterholders, members, and candidates.”

 Simon O’Connor, Former Chair of the GSIA, comments:

“For many years, our organizations have been working to define and clarify the language of responsible investment.  This foundation of experience and expertise enabled us to come together with a common purpose to clarify and harmonize these definitions on a global scale. We now encourage the investment industry and regulators to adopt these definitions to create greater consistency.” 

David Atkin, CEO at PRI, comments:

“Responsible investment has grown significantly, and so have the expectations for clear and transparent communication. Investors need language that enables them to communicate their responsible investment practices accurately, succinctly, and consistently. By unifying around common definitions, we support our signatories and members to communicate with confidence.”

The paper is available to read on each of the respective organization’s websites:

CFA Institute: here

GSIA: click here

PRI: click here

Download the paper here

Definitions

The terms agreed upon by CFA Institute, GSIA, and PRI are listed below. We would advise that these definitions are used within the context of the full report, which lists more information on each term, including a detailed explanation, a list of definitions that served as the primary inputs, and guidance for using the terms in practice.

• Screening (detailed definition on page 3): the application of rules based on defined criteria that determine whether an investment is permissible.
• ESG integration (page 8): ongoing consideration of ESG factors within an investment analysis and decision-making process with the aim to improve risk-adjusted returns.
• Thematic investing (page 12): selecting assets to access specified trends.
• Stewardship (page 14): The use of investor rights and influence to protect and enhance overall long-term value for clients and beneficiaries, including the common economic, social and environmental assets on which their interests depend.
• Impact investing (page 19): investing with the intention to generate a positive, measurable social and/or environmental impact alongside a financial return. This definition of impact investing is based on the Global Impact Investing Network definition of impact investments, which it defines as “investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return”.

About CFA Institute

CFA Institute is the global association of investment professionals that sets the standard for professional excellence and credentials. The organization is a champion of ethical behavior in investment markets and a respected source of knowledge in the global financial community. Our aim is to create an environment where investors’ interests come first, markets function at their best, and economies grow.

There are nearly 200,000 CFA® charterholders worldwide in more than 160 markets. CFA Institute has ten offices worldwide, and there are 160 local societies. For more information, visit www.cfainstitute.org or follow us on Linkedin and Twitter at @CFAInstitute.

About Global Sustainable Investment Alliance (GSIA)

GSIA is a global collaboration of sustainable investment membership-based organisations, aiming to unlock the power of the worldwide financial services industry to drive leadership, achieve a substantial impact on key global challenges, and accelerate the transition to a sustainable future.

GSIA simultaneously works to enhance the synergies between members, participate in global initiatives, and provide advice and support to local and regional sustainable investment organizations as they setup and grow.

GSIA’s members are drawn from Europe, Asia-Pacific and North America. Collectively GSIA’s members represent the mainstream of global finance and investment, managing tens of trillions of dollars in assets. GSIA members include Eurosif (European Sustainable Investment Forum), Japan SIF (Japan Sustainable Investment Forum), RIAA (Responsible Investment Association Australasia), RIA Canada (Responsible Investment Association Canada), UKSIF (UK Sustainable Investment and Finance Association), US SIF (the Forum for Sustainable and Responsible Investment).

About The Principles for Responsible Investment (PRI)

The Principles for Responsible Investment (PRI) is the world’s leading proponent of responsible investment. Supported by the United Nations, it works to understand the investment implications of environmental, social and governance (ESG) factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions. The PRI acts in the long-term interests of its signatories, of the financial markets and economies in which they operate and ultimately of the environment and society as a whole. Launched in New York in 2006, the PRI has grown to more than 5,000 signatories, managing over US$121 trillion. For more information visit www.unpri.org

The UK Sustainable Investment and Finance Association (UKSIF) has urged the government to launch its consultation on the Green Taxonomy, following the publication of the final Green Technical Advisory Group (GTAG) recommendation paper.

UKSIF has sat on the GTAG since its formation in 2021, providing insight on its members’ views on how a robust, science-based taxonomy ought to work in the UK.

The GTAG’s recommendation papers and final statement can be found here.

UKSIF CEO James Alexander said:

“Through its recommendations papers over the last two years, the Green Technical Advisory Group (GTAG) has highlighted to government how a ‘green taxonomy’ in the UK could help better enable investors and businesses to make the investments in the sustainable economy that are needed if the UK is to meet net-zero. We welcome today’s final recommendations published by the GTAG advising government to consider an ‘institutional home’ to oversee and support the long-term implementation of the taxonomy.

“Our members continue to require a clear, science-based taxonomy in the UK that provides valuable transparency over those economic activities supporting the UK’s climate objectives. The UK’s taxonomy should also seek to proactively shape the development of other taxonomies and disclosure regimes around the world.

“It is now vital that the government brings forward its green taxonomy consultation without further delay, with clear timelines set out for how and when it will be implemented.

While the majority of the UK public is uncomfortable with their investments negatively affecting the climate, many are not being provided with sufficient support from their employer or financial adviser to make sustainable investments in the market, new polling shows. 

In a survey carried out to launch UKSIF’s Good Money Week, UKSIF’s annual event aimed at promoting sustainability in UK retail finance, 69% of respondents with financial investments who reported having an employer or financial adviser have not been made aware of environmentally sustainable financial products available to them.

As a result, 58% of people with financial investments do not know whether their investments are environmentally sustainable. That is despite 69% of those surveyed reporting that they would be uncomfortable with their investments being in companies which negatively impact the environment and climate.

The polling also revealed that 70% of people with financial investments are uncomfortable with their savings or pensions being invested in companies which treat their workers, customers and wider society badly.

UKSIF CEO James Alexander said:

“The majority of the public does not want their investments and pensions savings being used to negatively harm the environment and climate, or lead to poor working conditions.

“There is clearly a need for employers, financial advisers, and all groups across the investment chain to do more to help their employees and clients take advantage of investments in those products that reflect their values, support the net-zero transition, and deliver good returns.

“We would also like to see financial advisers given the support they need to give their clients meaningful advice on how to invest in a sustainable manner. An important step will be clarity from the FCA on the regulatory approach to advisers and other retail-facing intermediaries under the UK’s upcoming SDR and labelling regime.”

Notes for editors:

• All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 2104 adults. Fieldwork was undertaken between 19th – 20th September 2023.  The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).

• CEOs of UKSIF, IIGCC and PRI send letter to UK Prime Minister Rishi Sunak following last week’s announcement on key net-zero policies.
• The letter signals deep concern with the recent proposals to ‘backtrack on vital policy measures that support the UK’s transition to net-zero’.
•  The letter urges the government to uphold the ‘four Cs’ that underpin effective policymaking – certainty, consistency, clarity, and continuity.

The CEOs of UKSIF, IIGCC and PRI, organisations working with a significant number of investors and financial services institutions, have sent a letter to UK Prime Minister Rishi Sunak focused on the importance of an ‘enabling policy environment’ to create the conditions for investors to be able to make long-term investment and asset allocation decisions.

The letter – supported by 32 investors and financial institutions – argues that delaying key targets and lowering the ambition of existing government policies would be ‘misguided’.

The letter acknowledges that while the government announcement included some positive policies, like the commitments to provide greater levels of financial support under the Boiler Upgrade Scheme and plans to speed up and enhance grid connectivity, overall the delay to key targets and lowering of ambition on existing government policies risks the UK missing out on investment to other regions and nations that are taking a more consistent, long-term approach.

CEO Quotes

James Alexander, CEO of UKSIF: “With his background in financial services, the Prime Minister knows how important it is that investors get clarity and consistency from government if they are to choose to invest at scale in this country.

“The UK is already at risk of falling behind other countries, who are forging ahead with huge incentives to accelerate net-zero investment, and the PM’s speech last week may only make matters worse.

“We urge him to reconsider his recent watering down of a number of climate change commitments, including the pushing back of the electric vehicle target, so that we do not miss out on the transformative investments needed to get to net-zero by 2050.”

Stephanie Pfeifer, CEO of IIGCC: “Investor confidence is crucial to the UK being able to enjoy the economic opportunities presented by the net zero transition, including investment and the jobs that brings. By backtracking on climate commitments, or taking steps that put into question whether the UK will deliver on its legislative long-term commitment to net-zero, the government’s announcement last week risks undermining this confidence.”

David Atkin, CEO of Principles for Responsible Investment: “The entire global economy – including the UK, its workers and communities – stands to benefit tremendously from a continued and accelerating transition to net-zero. Analysis by the CBI from earlier this year indicated an up to £57bn boost to UK economic growth by 2030 if the government accelerates progress on net zero. To secure these benefits, the UK government must not abandon its ambition on this vitally important topic. Investors remain committed to action on net zero and clearly recognise the benefits of doing so. It is now incumbent on the UK government to mirror this ambition and to take steps to deliver the benefits of a net-zero economy to the investment community and the country at large. The PRI and its partners stand ready to assist in this process.”

DISCLAIMER: This letter was developed in consultation between IIGCC, UKSIF, PRI and their members/signatories. However, the views expressed here do not necessarily represent the views of their entire memberships or signatories, either individually or collectively.

Notes to editors

About UKSIF

The UK Sustainable Investment and Finance Association (UKSIF) exists to bring together the UK’s sustainable finance and investment community and support our members to expand, enhance and promote this key sector. Our work drives growth and new opportunities for our members as global leaders in the sustainable finance industry.

UKSIF represents a diverse range of financial services firms committed to these aims, including investment managers, pension funds, banks, financial advisers, research providers and NGOs, with its 300+ members managing over £19trn in global assets under management (AUM).

About IIGCC

IIGCC brings the investment community together to work towards a net zero and climate resilient future. We create change the world needs by unlocking investor action on climate change.

Our work supports investors in generating returns for clients and beneficiaries, which in turn provides financial wellbeing for future generations. We work with our members to address climate risk and ensure they are well positioned to make the most of investment opportunities offered by climate mitigation and adaptation efforts, ensuring that their investments contribute towards a better world for us all to live in.

Our team supports investors to create practical solutions that can make a real difference in tackling climate change – providing guidance and support on investment practices, policies and corporate behaviours that have real impact and deliver change that the world needs. For more information visit www.iigcc.org and @iigccnews

About PRI

The Principles for Responsible Investment (PRI) is the world’s leading proponent of responsible investment. Supported by the United Nations, it works to understand the investment implications of environmental, social and governance (ESG) factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions. The PRI acts in the long-term interests of its signatories, of the financial markets and economies in which they operate and ultimately of the environment and society as a whole. Launched in New York in 2006, the PRI has grown to more than 5,000 signatories, managing over US$121 trillion. For more information visit www.unpri.org.

This letter is supported by 32 investors and financial institutions:

Aviva Investors
Border to Coast
Brunel Pension Partnership
Cardano
Castlefield Investment Partners
CCLA Investment Management
Church Commissioners for England
Church of England Pensions Board
ECO Advisors
Generation Investment Management LLP
Greenbank
Gresham House
Impax
Jupiter Asset Management Limited
Local Authority Pension Fund Forum
Local Pensions Partnership Investments Ltd
London Pensions Fund Authority
McInroy & Wood Limited
Mirova
National Trust
NILGSOC
Ninety One
Nordea Asset Management
P1 Investment Management
Redwheel
Robeco
SAUL Trustee Company
Stafford Capital Partners
The People’s Pension
Troy Asset Management
Universities Superannuation Scheme (USS)
WHEB Group

The UK Sustainable Investment and Finance Association (UKSIF) has announced the appointment of three new directors to its Board.

Ed Heaven (Head of Sustainable Investment at Montanaro Asset Management) has been elected by members to replace the departing Fong Yee Chan (Head of ESG Strategy, Europe, Vanguard), who had served on the Board since October 2017.

Sonali Siriwardena (Partner and Global Head of ESG at Simmons and Simmons and Member, FCA’s ESG Advisory Committee) has been co-opted to the board as a legal and regulatory affairs expert, and Dimple Mistry (Head, Human Resources Europe, Senior Vice President, GIC) has been co-opted as an HR expert.

UKSIF Chair, Jason Mitchell, said:

“The UKSIF Board is thrilled to be gaining from the skills and experience of Ed, Sonali and Dimple, and we look forward to working with them as we advance UKSIF’s ambitious mission. We also offer our thanks to Fong Yee Chan for six years of excellent strategic insights and contributions on the Board.”

Ed Heaven said:

“I am delighted to have been elected to the Board of UKSIF and look forward to supporting James and the team in building a sustainable and resilient financial system in the UK. We are at a critical juncture for the sustainability movement and UKSIF’s mission could not be more important.”  

Dimple Mistry said:

“I’m delighted to be joining the UKSIF Board at such a crucial time and look forward to working with the Board and staff team to further advance UKSIF as a great place to work.”

Sonali Siriwardena said:

“I am pleased to be joining the UKSIF board. UKSIF has a unique role as an umbrella body bringing together stakeholders from all across the financial ecosystem on the key issue of sustainability. I look forward to collaborating with UKSIF members to advance the future of sustainable finance in the UK.”