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Alexander True, Business Partner at Sarasin, offers seven questions to help investors sort the green from the greenwashed. With this in mind, we have put together a shortlist of seven questions to help investors sort the green from the greenwashed. Has your asset manager published a UK StewardshipCode statement?
“The third pillar deals with how to develop stewardship guidelines and implement them, with the fourth pillar focusing on financial and non-financial reporting and how to report that information to stakeholders, as well as covering practical issues such as greenwashing.
These new requirements are part of a bigger push right across the economy for new standards on environmental reporting to weed out greenwashing and support our transition to a net zero financial system – for example, through our new Sustainability Disclosure Requirements ,” she said.
In 2020, the FSA tightened the StewardshipCode to redefine responsibilities and explicitly instruct institutional investors “to consider sustainability (medium- to long-term sustainability including ESG factors) according to their investment management strategies in the course of their constructive engagement with investee companies”.
Shareholder advocacy and engagement has certainly not been spared from the broader debate around widespread greenwashing in responsible investing. Even with a lot of guidance from the likes of Principles for Responsible Investment and others, there are still clear differences in investor practices.
Scanning across to the Financial Reporting Council’s UK StewardshipCode, the 2020 Code represents a mature governance regime for UK-listed businesses. It has its origins in 1992’s Cadbury report and code, which covers the financial aspects of corporate governance.
This, coupled with a nascent taxonomy process, makes investors even more than usually vulnerable to greenwashing. . The region accounts for a rapidly rising share of ESG investment capital but only about 10% of the global ESG data market, according to estimates.
In its response, the Investment Association, also flagged issues arising from the use of sustainable albeit due to its status as a restricted term under the Financial Conduct Authoritys naming and marketing rules for sustainable funds.
A person close to the Australian Treasury understands that the ‘Finance Agenda’ consultation is likely to include disclosures, taxonomy, transition planning and greenwashing, including financial product labelling. Parker from RIAA welcomes the potential for a product labelling system in Australia.
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