New Study: UK leads Europe in sustainable and responsible investment

by Adrienne Lawler
April 2, 2019

UKSIF welcomes rapid growth in key sustainable investing strategies

  • Integrating environmental, social and governance factors into investment decisions has grown by 76% in the UK compared with 60% in Europe overall.
  • €2.2 trillion of UK assets exclude harmful industries such as tobacco and arms second only to Switzerland (€2.3trn)
  • The largest single style/country combination is engagement and voting in the UK which is practised in respect of €2.84trn London 29/11/18

The UK is the frontrunner in Europe for sustainable and responsible investment (‘SRI’) according to data published earlier this week by Eurosif, Europe’s sustainable and responsible investment membership organisation. Eurosif found that across Europe more investors are considering environmental, social and governance factors (‘ESG’) when taking investment decisions, and that this practice is particularly well developed in the UK. For instance, ‘ESG integration’, the policy of actively considering the impact of environmental, social and governance factors in investment decisions has grown by 76% in the UK compared with 60% in Europe overall.

Simon Howard, CEO of the UK Sustainable Investment and Finance Association said: “These data will come as no surprise to those who know UK sustainable finance. The drive and innovative flair of the UK’s experts in this area is clear. “The study confirms the irresistible logic of sustainable investment: that money should be managed considering risks such as climate change, and exploiting positive trends such as recycling. “UKSIF and its members have pushed this issue up the political agenda, and Government and regulators are now pursuing a policy environment that pushes investment to areas where, as this report shows, the UK has outstanding skills.”

The news comes as the UK’s Government and regulators step up efforts to manage ESG risks and promote sustainable finance. Earlier this month UK Government changed pension regulations to require schemes to consider ESG factors.

The UK’s Prudential Regulation Authority is consulting on requiring banks and insurers to identify a senior executive to take charge of managing climate change risks, and the Financial Conduct Authority is consulting on measures to boost green finance products and improve the management of climate-related financial risks.

Link to the full press release here

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