The UK’s Financial Conduct Authority (FCA) is now looking for input on methods of overseeing financial firms approaches and promises regarding ESG (environmental, social and governance), including its compensation practices regarding sustainability pledges.
The financial watchdog’s director of ESG Sacha Sadan recently stated that to boost confidence on the UK’s standards for ESG and to tackle the issue of green washing, it was important that the gap between statement and action was closed, transforming well-meaning commitments into real action. The director commented:
“We are committed to supporting the role of the financial sector in enabling an economy-wide transition to net zero, and to a sustainable future more broadly.”
The FCA is charged with regulating UK banks and other financial institutions like asset management and investment firms. UK consumers interested in acquiring ESG assets often seek out professional investment advice in Chester, Manchester, and other major cities. Wealth management teams are often called upon to create investment portfolios that match their client’s specific ethics or stance on sustainability.
As part of the ongoing initiative, the FCA will be studying sustainability-related governance, competence and incentives of financial firms. This is because its position on sustainability-related risks, impacts and opportunities is now coming under much closer scrutiny. The regulator stated that the governance arrangements, capabilities and incentive structures of financial firms in the UK must keep pace and stay consistent.
FCA officials will now take feedback until early May regarding the role it should play, and how suitable its current regulatory framework is to achieve sustainable goals.
