The finale of this ESG Pathway series, a joint venture from ESG Clarity and Square Mile, gave financial advisers detailed guidance on the upcoming legislation in 2021, while fund managers shared their views on the future of the responsible fund industry.
In the first session of the fourth ESG Pathway, held on 8 December, Simmons & Simmons trio Harald Glander, Daniel Lühmann and Catherine Weeks outlined the regulation responsible investors need to consider in 2021 with the EU Taxonomy and SFDR coming into force, for Europe at least; there is still confusion around what this means for the UK following Brexit, but it is likely there will be an equivalent.
See also: – ESG Pathway: Conversations with clients and how to avoid greenwashing
Lühmann shared the level of disclosure requirements and transparency that companies and products will need to adhere to to comply with SFDR from March, and Weeks explored the changes around MiFID suitability tests. Advisers will be required to ask ‘What are your sustainability preferences?’ in their client reviews, if they aren’t already, and also ensure systems are in place to ingest that information and deliver on those investor preferences.
During the Ask the Experts session, LGIM’s investment strategist Sarah Peasey shared her views on how responsible reporting is evolving and what to be aware of when comparing data, while Jupiter’s Abbie Llewellyn-Waters, manager of the Global Sustainable Equites Fund said ESG flows will continue to see momentum amid the worldwide humanitarian crisis and urged investors to consider “planet, people and profit” with their savings. Furthermore, Federated Hermes head of UK wholesale Dan Churchouse, discussed responsible style investing, funds with thematic tilts, and ESG integration at the group.
Platform speaker for the final ESG Pathway was James Dalby, from Aviva’s UK Savings & Retirement division, who urged advisers to have a look at the ESG in practise guide from TISA, and also highlighted the opportunity for providers to do more around education and guidance for advisers.
The Asset Manager Panel, hosted by Square Mile’s COO Jock Glover, saw Aegon’s Stephen Jones, AXA Investment Managers’ Chris Iggo, and Newton’s Andrew Parry discuss the future of the responsible fund industry.
Iggo said he believes investors will continue to be increasingly more considerate of environmental and social factors, and this trend that will accelerate further over next decade.
Newton’s Parry highlighted, however, there is still lot of work to be done in terms of labelling and transforming the system, while Aegon’s Jones pointed out there are still more fund managers called ‘Dave’ than any other name, indicating where D&I progress needs to be made in our own industry. He also gave examples of governance failures seen this year – reinforcing the fact we have a lot more to do in terms of improvement.
Meanwhile, the panel also discussed the implications of the change in US presidency, and other long term trends such as digitalisation; Iggo said while digitalisation is a long term theme and something that we have all felt and benefitted from this year, he said we are also on the brink of a golden age for industrial companies with an opportunity for older European companies to reinvent themselves in the carbon capture and battery space.
Additionally, the panel also discussed the importance of making sure companies really what they are reporting and implications of misleading data, echoing comments in the first panel from Simmons & Simmons on the amount of work that needs to be carried out in the reporting and disclosure space over the next few years.
If you have missed anything there are replays on the event site here and further coverage of the asset manager panel discussions here.
ESG Clarity and Square Mile would like to thank ESG Pathway’s sponsors, speakers and delegates for supporting this series. Stay tuned for similar educational initiatives next year.
