BSI, the UK’s national standards body, along with the Department for Business, Energy and Industrial Strategy (BEIS) and representatives of the UK financial services industry, has issued a set of standards that asset managers can use to integrate within their sustainable investments.
Interest in environmental, social and governance-related investing has been growing over the years but the momentum has gathered pace since Covid-19. Inflows into active ESG funds reached a record £392m in September, culminating into a quarterly total of £1bn, according to data from funds network Calastone.
A separate study by the Investment Association showed what it termed responsible investment funds enjoying a hefty 89% increase of assets under management over the 18 months to June 2020.
The difficulties of integration have been well documented due to the lack of uniformity of standards and definitions
The new voluntary UK standard sets out the requirements to establish, implement and manage the process of integrating responsibility and sustainability considerations into asset management. They are part of the renewed commitment to the UK’s Green Finance (GFS) strategy ahead of a fresh round of global climate talks.
Launched last year, GFS outlines how the finance sector and better climate disclosure from corporates can drive progress towards wider action on climate change and the push towards net-zero emissions.
“The financial system is playing a crucial role in helping to rebuild a more sustainable future through responsible economic growth,” said Scott Steedman, director of standards at BSI. “This is the first consensus for delivering responsible investment management at corporate level. The new standard, called PAS 7341, creates a way for financial management organisations to transition from ‘responsible’ to ‘sustainable’ investment management.”
Kwasi Kwarteng, Minister of State for Business, Energy and Clean Growth, added, “Transforming our financial system for a greener future is crucial as we build back better from Covid-19 and to meet our legally binding target for net zero carbon emissions by 2050. Building on our pioneering Green Finance Strategy, this new standard will help the UK investment sector become even more sustainable as we strive to lead the world in tackling climate change.”