Article by Phil
Having just had a look at what ESG investing is all about, the FCA has just published details of climate change disclosure measures it intends to introduce. This comes on the back of a report from the Taskforce on Climate Related Disclosures (TCFD), which recommends that asset managers, life insurers and pension providers should be required to make disclosures. The disclosure requirements will require the firms to make declaration about governance, strategy, risk management and measurable targets in relation to carbon emissions.
The requirements will fall on firms with assets in excess of £5 billion.
It is not surprising that the FCA is bringing in these requirements given the growth in ESG funds in the market. It would be unusual if the market regulating ESG funds did not have its own governance requirements.
Hot on the heels of this, the Chartered Body Alliance, which includes our own Chartered Insurance Institute (CII) have just announced the creation of a new qualification – the Certificate in Climate Risk.
The qualification looks at how financial services can interpret climate change data and use the skills to report on climate change risks in the sector. Presumably, this well help with the understanding of how ESG funds are performing to their objectives.
I would expect a strong demand for this new qualification which will no doubt be used to signal a firm’s green credentials. Exactly how it will directly benefit or affect climate change remains to be seen.
The initiative was introduced by outgoing Bank of England Governor Mark Carney, who wanted to leave a green legacy. The Certificate is not only available to CII Members but also those in the banking and investment sectors as well.
