Request Free Trial
August 25, 2022

Regulatory Round-up: UK FCA seeks external ESG experts; Florida’s state pension fund bans ESG

The UK Financial Conduct Authority is searching for external experts to join a new ESG advisory committee that will help shape the FCA’s strategy in this area and the way in which it oversees ESG issues. The small number of external experts will join the committee in a personal capacity and will need to abide by a conflict of interests policy, said the FCA. The new advisory committee is part of the FCA’s efforts to support the government in meeting its net zero target by 2050.

Florida‘s State Board of Administration has adopted a proposal by governor Ron DeSantis to discard ESG considerations when making investment decisions for the US state’s pension fund, which should focus purely on maximising returns. “Investment decisions must be based only on pecuniary factors,” reads the resolution, and these “do not include the consideration of the furtherance of social, political, or ideological interests”. In a statement, DeSantis said: “Corporate power has increasingly been utilized to impose an ideological agenda on the American people through the perversion of financial investment priorities under the euphemistic banners of environmental, social, and corporate governance and diversity, inclusion, and equity.”

US asset manager Federated Hermes, which has been a strong advocate of sustainable investing, has been put under pressure by some of its clients, three Danish pension funds, to clarify its sponsorship of the State Financial Officers Foundation, a Republican group that has criticised the Securities and Exchange Commission’s climate disclosures and has threatened to remove state pension assets from financial firms that do no support fossil fuel companies, as reported by the Financial Times.

The Australian Securities and Investments Commission has pledged to make enforcement action against greenwashing a priority. In its corporate plan, the regulator revealed it has made sustainable finance one of its four work priorities through to 2026. As part of this pillar, it said it will take action against “misconduct, including misleading marketing and greenwashing by entities”.

China has published plans for standardising its statistics and accounts system for carbon emissions, according to ESG Investor. The plan proposes that by 2023, China should have a unified and standardised carbon emission statistical and accounting system.

A service from the Financial Times