The global asset management business of Aviva has launched ‘ESG: Know How’, an initiative designed to meet the rising demand for better adviser knowledge of environmental, social and governance (ESG) investing.
‘ESG: Know How’ is an online, interactive, CPD-accredited training programme for financial advisers to help prepare for the regulatory changes being introduced from early 2021.
The proposed changes to the Markets in Financial Instruments Directive (Mifid) II will bring financial advice firms in line with the EU’s sustainable finance action plan through the integration of sustainability and ESG considerations.
As a result, it will become mandatory for firms to include questions on ESG investing as part of their suitability process with clients.
Some 280 advisers have signed up to the academy so far.
Lack of training
Aviva research found that many advisers are not getting access to the ESG training and resources they need ahead of the regulatory changes.
Many advisers feel out of the loop on ESG issues, with nearly half (45%) admitting to having had no ESG training at all.
Despite 92% of advisers believing that ESG will constitute a larger proportion of their business in two years’ time, this doesn’t appear to be influencing current day-to-day practice.
Just 35% say they take ESG into consideration every time they discuss investment options with clients.
The survey results hinted that this may be due to a lack of confidence around the issue. When asked about the main reason for integrating ESG into conversations with clients, only 5% said it was because they were confident to do so.
Huge change
Thomas Tayler, senior manager, sustainable finance centre for excellence at Aviva Investors, said: “With an unprecedented amount of ESG regulatory transformation in progress, many financial advisers are about to face a huge change in the way they conduct business.
“For the first time, firms must disclose how sustainability risk is integrated into investment decisions for products, show the expected effect of sustainability risk on the product’s financial returns, and be able to prove how adverse impacts are identified and mitigated and advisers will need to help clients navigate all that information.
“The EU is at the forefront of this transformation and the pressure to create a ‘green recovery’ to the covid-19 pandemic has further increased the focus on this area.
“We see a huge opportunity for businesses and advisers to influence meaningful change in business practices and wider society.
“As the public becomes increasingly concerned about sustainability, these changes have the potential to connect people with their savings and investments like never before and empower them to transform the way their money is invested.”
