UKSIF Annual Leadership Summit: Summary

21 Nov

Held in the seat of government (Westminster), the UKSIF Annual Leadership Summit addressed a range of issues with a strong focus on policy and regulation.

COP28. Expect the host country (UAE) and its enormous oil and gas lobby to have a significant impact on this year’s COP proceedings. With the mere mention of fossil fuels only appearing in last year’s COP, discussions are expected to focus heavily on the “phase-down” vs “phase-out” question (with the EU and other developed nations advocating for a complete end to fossil fuel use while many of the fossil fuel dependent nations and those with economic interests tied to them seek a slower transition or phase-down). The investment community is advised to resist pressure to give up on the 1.5C goal, focus on the opportunities from decarbonising and steer government towards the removal of critical barriers e.g. around planning regulations and grid connections.

FCA update. The regulator’s Sacha Sadan noted the importance of trust, comparability and interoperability when developing its new rules and standards. Commenting on next steps, he noted the forthcoming release of the SDR (expected in December) and the FCA’s plan to embed the new rules rather than create further new ones. Convergence is where he sees the industry going, with interoperability of the ISSB, TNFD, ESG ratings and Code of Conduct rules.

Regulation. Consumers want their pensions and savings to reflect their values; building their confidence in sustainable products is therefore a priority. The industry now also needs to move away from simple disclosure to more closely integrating and embedding the recommendations set out in regulation.

Policy. Despite repeated attempts to “reset” his leadership and create a culture war over ESG and climate issues, Rishi Sunak has failed to gain support in the polls. Evidence suggests people of both sides of the political divide broadly support climate action. The ESG backlash has not converted fully in the UK context, though some delays have been caused. More emphasis on the opportunities and benefits from decarbonisation is now needed – jobs, health, cost savings – to bring people along and avoid resentment precipitated by the imposition of poorly conveyed climate related policies.

Biodiversity. Although some data is likely to be lacking at first and location-specific requirements are expected to be more challenging to meet than those sought in the TCFD, TNFD signatories are advised to get started and build capacity and knowledge as they go. Signatories don’t need to meet all 14 recommendations straight away but should prioritise significant ones and work with the information they already have.