We hosted a fascinating conference last week in collaboration with TISA, at our offices in London, the “ESG Investing Conference”. It was a great opportunity to join-up with some really interesting and passionate experts and  get an expanded understanding some of the most pressing issues facing the funds industry in this space. Some of the many questions that we explored were these:

  • Do consumers value sustainability over return when it comes to choosing investments? Do they really?
  • How do we corral the data – enormous amounts of it – that are needed to complete all of the various disclosures that need to be made?
  • Does SDR give the UK a competitive edge?
  • How does SDR look relative to SFDR?
  • What about OFR?
  • Do we really need a label?
  • How do we get a label and what are the timescales for getting one?
  • Is any of this really helping the consumers? Is it ensuring that they are able to make good choices about where to invest their money?
  • Can we trust the data? 
  • How can we use AI to help us when the underlying data is problematic?

I certainly came away with the impression that the UK, as a second mover in this game, has learned a lot from the process that the EU has been through with the implementation of SFDR, and that once the initial teething problems resolve with the application process, and the naming and marketing rules open up new and alternative opportunities, the UK could well be off to a flying start. 

Overriding all the gnarly technical discussions about rules, regulations, regulatory obstacles, unreliable data, how to use AI…….perhaps the most important takeaway was that at the focus of all of this should be the consumer. At the root of this is a need for the industry to be able to deliver a clear, comprehensible, and comparable message to investors about where it would be smart for them to invest their money. The meshing of SDR with the Consumer Duty is absolutely without doubt.

We will be exploring these issues in further blogs, on which note, here is a hot off the press one which looks at the interaction between SDR and OFR.