Financing the Future: Financial Services

UKSIF's key recommendations to establish the UK as the world leader in sustainable finance

After years of trail-blazing and being ranked number one on the Global Green Finance Index, the UK’s world-leading position is under threat. A lack of urgency from policymakers in completing a clear and stable financial services regulatory framework is hindering the UK’s ambition to be the world’s sustainable finance hub. This report identifies the regulatory gaps and what is at stake should the UK fail to fill them.

Created in consultation with our membership, and informed by an in-depth survey of the financial services industry in the UK, this report sets out three core areas in which policymakers must improve in order to re-establish the UK as the world’s leading sustainable finance hub.

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Key Recommendations

1. Deliver a clear and world-leading sustainability disclosure regime

Critical steps include the adoption of the International Sustainability Standards Board (ISSB) standards, the introduction of mandatory corporate transition plans and crucially a UK green taxonomy. The UK should use its position in international bodies such as the G7 and IOSCO to push for greater harmonisation of standards internationally.

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2. Empower investors by clarifying the fiduciary duty of pension schemes

Clarification of fiduciary duties from policymakers would address the lack of clarity in the market that has arguably contributed to a more risk-averse culture of investing in the UK. The Pensions Regulator (TPR) must issue clarification to make it clearer to pension schemes that factoring in financially material ESG issues and actively managing associated risks and impacts is consistent with fiduciary duties.

UKSIF is also calling for investment consultants to be brought under formal FCA regulatory scope.

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3. Embed biodiversity into the regulatory framework

If the UK is to meet its commitment to halt nature loss by 2030 and meet international commitments, policymakers and regulators must turn their focus beyond climate change risks alone. The Government must look to the incorporation of the Taskforce on Nature-related Financial Disclosures (TNFD) framework to address the financial risks posed by damage to the world’s biodiversity and reducing the economic impact on GDP.

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Industry Polling

Results of poll of 100 leaders across the UK's financial services industry

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