Following the Investment Association’s annoucement it will launch a consultation on ESG fund classification, Neville White, head of SRI policy and research at EdenTree Investment Management, says this represents a golden opportunity to take the lead on transparancy around responsible and sustainable investments…
We welcome the announcement that the Investment Association is to lead a consultation on the classification of environmental, social and governance (ESG) Funds in the UK.
The vibrancy of the responsible and sustainable investment market is hugely encouraging. However, mainstream adoption is masking a growing confusion over ESG fund terminology and what clients can expect when they buy a labelled fund. This is particularly true of the growing proliferation of sustainability funds.
We welcome anything that brings clarity and greater transparency to an important market, and where traditionally the UK has led. We remain concerned that the European Union’s ‘one size fits all’ approach towards ESG will be a missed opportunity to recognise the rich range of models available to clients – albeit models we feel need proper classification.”