Environmental, social and governance (ESG) investing has become one of the biggest crazes in the wealth management sector, but not all of UK financial services professionals are convinced their firms are committed to it.
The Chartered Institute for Securities & Investment (CISI) surveyed 563 professionals in the capital markets, wealth management and financial planning sector.
The survey found only 20% are confident that their firms are committed to ethical finance policies and ESG principles when it comes to their lending, investing, wealth management and fund management activities.
Some 10% said they were ‘neutral’, while 70% said they were ‘not confident’.
Source: CISI
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There were several positive comments during the survey about some firms’ ESG contributions, such as “we have a large project underway at group level to deliver ESG products and services as soon as possible” and “we are working on ESG versions of all our model portfolios.”
But most statements were not so complimentary:
- “Traction with senior management proving challenging;”
- “The owner of the business I now work for is sceptical over new funds being guided to a more ESG investment stance, he argues that even government bonds are not ethical as most governments invest in arms, nuclear power and weapons;”
- “American firm, overall not a good attitude to anything other than making money, mental health, charity, social, environment all not important;” and
- “Poor data declaration by investment companies, especially in the small market cap and emerging markets sectors makes these goals almost impossible for small asset managers.”
‘Long way to go’
Simon Culhane, CISI chief executive, said: “Our survey shows that some firms are making good progress, but we still have a long way to go as a profession to prove our ESG credentials.
“ESG assets were reported last year to have out-performed their peers across major equity markets. However, the recent Common Wealth report found a third of low-carbon funds were investing in oil and gas.
“As one of our survey respondents has noted, we now need a universally agreed benchmark, common set of standards and ratings across the ESG universe which will ultimately provide the confidence and trust investors need to further support this rapidly expanding and important ethical finance area.”
