By Onome Amuge
Only 20 per cent of workers in the UK financial services profession are confident that their firms are committed to ethical finance policies and Environmental,Social and Governance (ESG) principles when it comes to their lending, investing, wealth management and fund management activities, a recent survey conducted by the Chartered Institute for Securities & Investment (CISI), has revealed.
The CISI, a not-for-profit chartered professional body for those working in capital markets, wealth management and financial planning, undertook the survey involving 563 respondents between October 6 – December 17, 2020.
Against the background of the United Nations Environment Programme Finance Initiative (UNEPFI), which is working in partnership with the global banking community to increase lending that supports socially and environmentally sustainable economic activities, survey respondents were asked the question, “How confident are you that your firm is committed to the adoption and execution of ethical finance policies and ESG principles as regards lending, investing, wealth management and fund management activities?”
Of the 563 respondents quizzed, 20 per cent said they were confident, 10 per cent said they were “neutral”, while the other 70 per cent declared “not confident”.
Many of the respondents who expressed confidence cited the development of ESG versions of model portfolios and a group level project to deliver ESG products and services.
Those who were not confident mentioned factors that included the challenge of gaining traction with senior management, too many ESG ratings agencies and poor data declaration from investee firms.
One respondent who once worked for an American firm said the organisation had a bad attitude towards anything other than making money while mental health, charity, and the social environment were regarded as not being important.
Another respondent said the business owner was sceptical about ESG funds and had argued that government bonds were unethical as it is believed most governments invest in arms, nuclear power and weapons.
Commenting on the responses, Simon Culhane, the CISI CEO, stated that climate related risks and the deterioration of the world’s natural capital assets are the most significant issues of our time. He added that support across firms for ESG and ethical finance is crucial for future sustainability and stewardship of the world.
“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,” he said.
Culhane further asserted that what is required is a universally agreed benchmark, a 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.
