UK presents sustainability disclosure rules in new report
UK Chancellor Rishi Sunak on Monday unveiled sustainability disclosure requirements for pension funds, asset managers and other companies.
The new requirements aim to prevent green laundering and give investors more information on how investments align with net zero ambitions. Details on specific reporting requirements, scope and timing will be developed after public consultation.
A companion report, Greening Finance: A Roadmap to Sustainable Investing, explains how disclosure requirements will work and outlines other legislative and regulatory changes planned to standardize environmental sustainability reporting.
The report also predicts that the pensions and investment industry will use the information generated by the reporting rules to start shifting financial flows to align with a net zero economy.
“We want sustainability to be a key part of investment decisions, and our plans will provide investors with the right information to make more environmentally friendly decisions,” Sunak said in a statement issued with the report.
Diandra Soobiah, responsible investment manager for the UK’s £ 20.9bn ($ 28.7bn) multi-employer defined contribution plan, National Employment Savings Trust, London, said in a th -mail that the new standards should facilitate sustainable investment.
“Public disclosure of the environmental impact of investments will help us as investors make better decisions about the companies and initiatives in which we invest,” said Ms. Soobiah. “It will be easier to understand the risks of sustainability and the opportunities that exist and to improve accountability at every step of the investment chain.”
David Fairs, executive director of regulatory policy, analysis and advice for The Pensions Regulator, in a separate statement, welcomed the new reporting requirements.
“A warming world, loss of biodiversity and depletion of the natural environment all have the potential to worsen retirements due to supply disruption, loss of assets or loss of life. the weakening of an employer’s ability to support the funding of pension plans, ”said Mr. Fairs. “A transition to sustainable investments and a net zero economy can also present opportunities that directors should also be aware of. The pension industry must understand that this problem is real and urgent. “
Claire Jones, responsible investment manager for retirement consultant Lane Clark & Peacock, said in a separate statement that the roadmap “provides welcome clarity on these plans and how they fit together.” .
But she added that “with many international investments, improving sustainability information by UK businesses will only provide a small part of the information they need to help them achieve their goals. For this to be effective, there must be a harmonization of international rules. The government recognizes that it must seek faster global action on this issue. “
Dan Mikulskis, investment partner at LCP, said in an emailed statement that for asset managers, “we don’t think these rules will be a game-changer.”
“Right now we’re seeing huge gaps between managers’ sustainability practices, especially in stewardship, and we think this could be one of the most impactful areas if standards are improved. Said Mr. Mikulskis. “Investors will need to continue to conduct independent research into the practices of investment managers when there are huge gaps in standards. Asset managers also need to better explain their thinking on climate change.
“It goes far beyond just disclosing data and ticking boxes to meet regulatory requirements and involves helping customers understand how they should think about climate change, while providing data that can be effectively consolidated in a portfolio. “