Financial Services Bill Amendment: Duty to Report on ESG Status of Funds

Today (1 March 2021) is day three of committee stage for the Financial Services Bill in the House of Lords. I am putting forward an amendment which would require fund managers to report to the Financial Conduct Authority on how their funds, and each constituent part of their funds, satisfy such environmental, social and governance (ESG) requirements as may be prescribed.

The full text of the amendment is set out below:

Insert the following new Clause:
“Duty to report on environmental, social and governance status of funds
(1) Within three months of the passing of this Act, the Secretary of State must by regulations made by statutory instrument provide that all fund managers regulated by the FCA must report to the FCA on how their funds, and each constituent part of their funds, satisfy such environmental, social and governance requirements as may be prescribed.
(2) Regulations under subsection
(1) are subject to the affirmative procedure.”
Amendment 136A, Committee Stage Day 3, Financial Services Bill, House of Lords 1 March 2021

The purpose behind this amendment can best be described as:

‘what point profit, if no planet to spend it on?’

Fund managers have trillions under their management. Trillions which -without distorting or over stepping into the market – could be better focussed to such ESG goals as may be determined through open discussion and debate in the public arena.

New technologies, such as blockchain or distributed ledger technologies (DLT) and artificial intelligence (AI) will be well able to assist in this mission in terms of the collection, analysis and status and report generating requirements.

The Chancellor’s green finance statements, not least last November, begin to set the right course, a course where the UK can excel.

This amendment could play a small, but significant part in driving us forward. Creating sustainable jobs and opportunities in a, rightly, reframed prosperous economy. A future economy: now.

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