CEO of the UK Sustainable Investment and Finance Association (UKSIF) James Alexander has called on the investment industry to stop using ‘ESG’ as a way to describe sustainable investing as polls carried out by the organisation indicate it could be open to misinterpretation.
In the opening remarks of the Good Money Week event run by SRI Services on 3 October, Alexander urged advisers to use “plain English” as he said UKSIF is also about to publish a guide on how to talk to clients about sustainability.
“In our polls 80% of people had heard of sustainability, and 79% had heard of responsible investing.
“But only 53% had heard of ESG investing – the other 47% had never heard of it. It is a term we should start avoiding.”
Further, Alexander pointed to the anti-ESG backlash in the US and it being associated with “woke finance” as another reason to stop using the term.
“We need to make sure people are not falling for that, and we need to start using phrases like “sustainability” and “responsible” more as people understand them and are more favourable towards them.”
Meanwhile, Julia Dreblow, founder of SRI Services and Fund EcoMarket, also emphasised in her opening remarks “language matters”.
She went through the various terms and words the industry has used over the years in this space to try and clarify each definition but added: “If the whole world started to call this ethical investing, I wouldn’t care. What I care about are the funds doing good things and are the right funds getting in front of the right clients?”
‘Shifting foundations’
Discussing the challenges of the implementation of SDR and general mood towards sustainable investing, Dreblow urged the industry to “come together” and “build a different future” despite the difficulties.
“The challenges ahead of us are immense but we need to shift that dial from brown across to green.
“It is not going to be perfect, but anything we can do at this time to make it better and shift those foundations is good.”
