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NACFB: More than just hot air
More than just hot air
The plan to turn talk into meaningful action
Rob Levitt Compliance Officer NACFB
November’s COP26 climate conference arrived in Glasgow amidst soaring energy prices. The UK had also just braced a petrol crisis, highlighting our oil dependency, and even if you had a full tank, your journey could well have been disrupted by Insulate Britain protestors firmly affixed to the road. Hard to argue then that the conference was not at least timely.
But the timeliness of the summit did not necessarily translate into meaningful action. Indeed, although China and Russia sent delegates, leadership from these two nations, which are among the biggest global polluters, was noticeable by its absence. Before taking a private jet back to London, Boris Johnson made some of the right noises, but the resulting talks failed to yield any substance as the minute hand of the doomsday clock ticked ever closer to midnight. However, its rules were not onshored prior to the UK’s exit from the EU. The FCA is now introducing its own Sustainability Disclosure Requirements (SDR) for firms involved in investment management and decision-making processes.
Plans to classify sustainable investments into distinct groups may also be aligned with existing SFDR categories, the regulator said in its discussion paper. Before setting out that it will: “…develop proposals on this in due course, working with government. We welcome any views on this approach and any particular considerations that we would need to take account of in our proposals.”
The labels and criteria are intended to help consumers navigate their sustainability characteristics and the input received will guide the FCA’s policy design in this area, ahead of consultation on new proposals in spring next year.
The NACFB will share with the membership guidance on any reporting obligations the FCA implements in the future and is actively exploring new services to help support decarbonisation efforts for intermediaries.
The role of the regulator
With a leadership vacuum at the highest levels, it does then fall to others to fill the void. Step up, the regulator. Indeed, the Financial Conduct Authority (FCA) is set to require intermediaries to consider sustainability issues when advising clients, in line with rules introduced on the Continent earlier this year.
In a discussion paper published in early November, to coincide with COP26 Finance Day, the FCA invited views on potential criteria to classify and label investment products, and said it was minded to introduce specific rules for advisers. Europe’s Sustainable Finance Disclosure Regulation, which came into force at the start of 2021, already makes sustainability-related demands of advisers.
