IA launches first industry-wide consultation on sustainability and responsible investment

Written by Oliver Wade
28/01/2019

The Investment Association (IA) announced on Friday the launch of the first industry-wide consultation on sustainability and responsible investment

The purpose of the consultation is to seek the views of asset managers on key aspects surrounding sustainability and responsible investment, with the intention of bringing greater clarity to help savers and investors navigate and grant better access to this “growing feature” of the investment management industry.

The IA has revealed that the consultation will focus on three key areas; agreed standard definitions, the development of a UK product label, and the ‘stock-take’ of reporting frameworks.

With regards to the agreed standard definitions, the IA has proposed creating a set of industry-endorsed standard definitions for the different sustainable investment approaches, including commonly used terms such as ESG (environmental, social and governance) integrations, impact investing, and negative screening.

The second area, the development of a UK product label, proposed the concept of identifying a voluntary UK product label designed to assist retail investors and their advisers in identifying funds that have adopted a sustainable investment approach. According to the IA, the label would also “draw attention” to the sustainability and responsible investment expertise within the UK.

The final aspect suggested reviewing the reporting frameworks used by asset managers to disclose how they embed ESG considerations into their investment process, and the impact that their investments have had on wider sustainability indicators.

Commenting on the consultation, IA chief executive Chris Cummings said: “Social and environmental change is happening faster than ever before. The asset management industry is at a critical juncture in embracing sustainability as a defining feature of the investment landscape.

“With sustainability and responsible investment becoming an increasing priority for today’s investors, this consultation is an important step forward in gathering the views of the industry with the ultimate aim of bringing greater clarity to savers.

“As significant investors, it is our role to help today’s investors achieve both their financial as well as their environmental and social goals.”

Speaking on behalf of the organisation, Royal London head of sustainable investments Mike Fox added: “We whole-heartedly welcome the initiative launched today by the Investment Association. Sustainable and responsible investing is a rapidly growing role for asset managers to adopt in an effort to support positive social and economic development.

“This, coupled with delivering on the needs of savers, is becoming increasingly important. We therefore believe that this initiative will be a significant step in providing clarity and consistency to a fast evolving part of the investment industry.”

The consultation will close on 1 March 2019.

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