UK economic secretary urges fund groups to ramp up net zero commitments

UK economic secretary John Glen has urged asset managers to step up on ESG amid plans to match the EU's net zero plans

John Glen MP, the Economic Secretary to the UK Treasury, has called for the investment management community to “do more” to promote environmentally and socially responsible investing.

Speaking at an Investment Association conference for the UK investment industry on Monday, the MP reassured investment managers that responsible investing and sustainability remain a key focus for the government.

While tackling Covid-19 is currently the government’s top priority, Glen said the crisis has “thrown into sharp relief the importance of the S in ESG”, adding that “the climate crisis hasn’t gone away, and it is more important than ever that we take ESG factors into account as we rebuild our country”.

According to the MP, the work of the investment management sector in building back “better and greener” will be especially important as the UK “looks to deepen its relationship with international partners” and strengthen its position as a “leading global financial hub”.

He said: “The UK investment management industry has a crucial role to play in addressing these issues through the development of responsible investing.”

He added he welcomes the IA’s work in this area, such as the publication of a Responsible Investment Framework last year, and other sector-wide initiatives.

However, the MP called on the sector to “do more: both in terms of protecting our climate and the societies that depend on it”.

“For our climate, there is more for you to do in making your own net zero commitments; by supporting accurate disclosures through Taskforce on Climate-Related Financial Disclosures (TCFD), financing green projects, and moving away from the polluting growth models of the past,” he said.

Matthew Cady, investment strategist at Brooks Macdonald, agreed that “a key focus for the UK’s asset management industry is to continue to build on its strengths in sustainability and responsible investment in order to tackle the challenges facing our world today, and to take advantage of the opportunities that come with it”.

Glen said investment managers were responsible for driving social change, as they have a key role to play in promoting fair pay, improving treatment of employees and reducing social inequality.

“Together, and only together, can we build on the UK’s proud track record and continue to lead the world in sustainability and responsible investing,” he said.

In addition, he noted that under the Green Finance Strategy, listed companies and large asset managers must make climate related disclosures by 2022, in line with the recommendations of the TCFD.

To facilitate a greater focus on these issues, this summer the Economic Secretary launched the Green Finance Education Charter to ensure all financial qualifications and certificated include knowledge and understanding of green finance.

“We need the people in the financial sector – people like you – to be able to make good decisions with this new information we are generating,” he told the asset management sector.

Matching EU ambitions

Meanwhile, Glen has also vowed to “at the very least” match the ambition of the EU Sustainable Finance Action Plan, promising more details “in due course”.

He said the government is committed to creating “inter-operable global standards to drive forward the transition to net zero”, while giving the asset management sector the opportunity to “become global leaders in this field”.

Commenting on the MP’s speech, Cady said: “It is encouraging that sustainability and responsible investment continues to be an important part of the government’s agenda.”

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Natalie Kenway

Natalie is global head of ESG insight for ESG Clarity and has been an investment journalist for 16 years. She won Editor of the Year at the Aviva Investors Sustainability Media Awards 2021, and was Winner...