The UK’s financial services sector has a chance to reassert leadership by focusing on sustainability

The UK’s sustainable finance and investment association UKSIF has called on the government, pension funds, and all financial sectors to take on environmental, social and corporate governance factors to build a more sustainable and resilient economy.

Launching a new report on the 20th anniversary of its founding, UKSIF is pushing for the UK to bring sustainable investment from the “margins to the mainstream” in order to preserve its position as the world’s leading financial centre and meet the approaching challenges of limited resources and climate change, says UKSIF’s chief executive Penny Shepherd.

“The UK must recognise the green jewel in its crown and invest in it,” Shepherd says.

UKSIF’s report – Taking Responsibility: Achieving Resilience – warns that the world will soon be facing a “perfect storm” of climate change consequences. The report quotes Sir John Beddington, the UK government’s chief scientific adviser, who says that by 2030 the world will need to produce approximately 50% more food, 50% more energy, and 30% more fresh water while adapting to the effects of climate change.

“Today, we are all working our way out of one global crisis, the warning signs of which went largely unrecognised,” says Martin Clarke, UKSIF’s chairman. “The next crisis is plainly visible and even more challenging.” Clarke argues that “everyone” has to play a part in accelerating “the drive to sustainable investment and finance”.

Cushioned from the blows?

As a relatively wealthy nation, the UK may be somewhat cushioned from these resources demands and the impacts of climate change may not be as clear as in poorer countries, according to Seb Beloe, the head of SRI research at Henderson Global Investors. Yet, he suspects that the UK remains vulnerable in ways that may not be immediately anticipated.

The key to meeting these monumental demands for the UK is embracing sustainable finance in order to maintain a successful economy within the environmental limitations of the future, Shepherd says.

And Beloe argues that socially responsible investing is no longer considered a risky investment if done intelligently and has the potential to offer ethical and commercial value.

The report offers recommendations for a variety of financial actors, including asset owners and managers, financial regulators, trade and professional associates and civil society, on how to embrace and enhance sustainable investing. Primarily, UKSIF encourages these actors to ensure transparency, particularly in dealings with environmental, social, and corporate governance factors.

UKSIF promotes sustainable and responsible investing by offering networking opportunities for financial institutions, investment consultants and researchers, financial advisors, pension funds and foundations, and others throughout the UK, and supports other sustainable finance and investment associations throughout the world.

Despite the difficulties of the tasks at hand, meeting these challenges also presents the UK with an opportunity to lead the way in sustainable finance, Shepherd says.

Currently, nearly £940bn in assets is responsibly managed in the UK, which is nearly 14% of the £6.5tn-plus in responsibly managed assets that is tracked by sustainable investment and finance associations around the world. 

 



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