FCA paper to help investors make better ESG decisions

The Financial Conduct Authority (FCA) has published a discussion paper which aims to help investors make better ESG investment decisions.

The paper, which was published to coincide with Wednesday's COP26 Finance Day, invites views on potential criteria to classify and label investment products so that consumers can better navigate their sustainability characteristics.

The UK watchdog said that the input received will guide the FCA’s policy design in this area, ahead of consultation on new proposals in spring next year.

In a recent FCA survey, 80 per cent of respondents said they wanted their money to ‘do some good’, while also providing a financial return, 71 per cent wanted to ‘invest in a way that is protecting the environment,’ and 71 per cent would not put their money into ‘investments which are unethical’.

“It is vital that we innovate to support industry’s shift to a more sustainable future. That is why the FCA has been leading from the front,” said Nikhil Rathi, chief executive, FCA. “Developing consistent, trusted standards are a vital part of that, giving investors the confidence to put their money where it can deliver the most sustainable outcome.”

Rathi added: “The strategy we have published today puts these standards front and centre, supported by supervision and enforcement where firms fail to meet them.”

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