This Blog is now Closed

In 2010, UKSIF is championing sustainable capital markets by influencing and supporting public policy and investor behaviour on:

• Responsible Ownership through effective implementation of the Stewardship Code and related measures

• Financing a Low Carbon and Sustainable Economy through green bonds and other socially useful financial innovation

• Further Innovation and Cultural Change in financial services to better meet the long term needs of providers and users of capital and advance sustainable development at the same time

For more on our support for sustainable capital markets, please visit the regulation, standards and public policy section of the UKSIF web site.

Thank you to all who participated in the debate in 2009.

Progress towards Sustainable Capital Markets

This blog was launched nine months ago to track progress in building more sustainable capital markets. Now seems a good time to reflect on this year’s developments. From a UK perspective, which are the most significant signals of future change?

Here is my list of the key trends from 2009:

• Civil society starts to demand a more accountable finance sector

Eg. Anger at remuneration levels, Deepening of NGO research and campaigns

• Politicians, regulators and industry leaders increase support for good governance of asset owners and more responsible ownership of assets

Eg. Lord Myners’ emphasis on “ownerless corporations”, The Pensions Regulator’s governance campaign, the Walker Report’s Stewardship Code recommendations, Personal Accounts Delivery Authority Investment Consultation responses

• Modern green and ethical retail investors and their advisers seek positive ways to make money and make a difference with some of their investments

Eg. YouGov research for National Ethical Investment Week 2009, Conservatives commit to “Green ISAs”

• Stock exchanges deepen their focus on support for sustainability

Eg. World Federation of Stock Exchanges publishes interactive “Exchanges and Sustainable Investment” report, UN hosts sustainable stock exchanges event

• Bonds and other financial instruments for sustainable infrastructure move up the agenda

Eg. HSBC’s Vaccine Bond, second and third issues of World Bank green bonds, the Climate Bonds Initiative

In twelve months time, will these still seem like the key developments in 2009?

A great Lord Mayor's speech

In his banquet speech last night, the new Lord Mayor called for a re-established social contract between financial institutions and the society they serve.

He suggested that the contract recognise “on the one hand that the UK benefits from financial services, and on the other that we need to do whatever it takes to serve the interests of the individual as well as those of the wider economy”.

The Lord Mayor’s speech also identified that climate change “may be an even greater threat” than the economic crisis. He called for the City to consider, post Copenhagen, how it can build on its leadership in sustainable finance to “do yet more to bring our expertise to bear on building sustainable solutions.”

If this is an early indication, we can expect much from the new Lord Mayor's year in office.

We’ll be back after National Ethical Investment Week!

The UKSIF team are rather busy this week, co-ordinating the second National Ethical Investment Week to spread the word about green and ethical investing to consumers, financial advisers and charities.

Our research has found that half of Britons with savings and investments would like to make money and make a difference. We are flagging up that today’s green and ethical investments are a great way to do this – particularly in the run-up to the Copenhagen summit.

For example, we are offering financial advisers “Summit to think about” at Money Marketing Online.

But, as a result, we won’t be posting any more to this blog until the week is over.

Have a happy National Ethical Investment Week 2009.

Global Centre Report: A Missed Opportunity for Green Leadership?

Yesterday saw the launch of “Asset management: the UK as a global centre”, a report produced under the joint chairmanship of the Chancellor of the Exchequer and the Chair of the UK’s Investment Management Association.

There is a major missed opportunity in the report. This can be summed up in three words - “carbon”, “climate” and “green”. I searched the PDF for all of them. Each returned “No matches were found”.

So, within a month of the Copenhagen Summit, this significant report on future UK leadership in asset management doesn’t even mention the challenge of redirecting capital towards low carbon industrial and social transformation.

Welcoming the report, Financial Services Secretary Paul Myners said he looked forward to “… the prospect of on-going engagement with the industry on .. the role of markets in society and ethical and moral dimensions to investment”. Lets hope he addresses this!

Capital and Control

The flow of reports and comments in the run-up to both Copenhagen and the final recommendations of the Walker Review continues this week.

“Catalysing low-carbon growth in developing economies: Public Finance Mechanisms to scale up private sector investments in climate solutions” is the latest on “capital” for the low carbon economy. It was launched today by UNEP in partnership with an impressive range of pension, investment and insurance organisations.

Meanwhile, on effective shareholder ownership and “control”, I was struck by this piece “not more regulation, more Responsibility” from Colin Melvin of Hermes in Sunday’s Independent.

Is more focus on “having fun” part of the way forward for the finance sector?

As the recent Tomorrow’s Company report “Tomorrow’s Innovation, Risk and Governance” highlights, creating an effective organisational culture is an essential part of building successful and sustainable organisations in the finance sector and elsewhere.

So following my post on the Archbishop of Canterbury’s speech, I was fascinated by this contribution from Cognitive Policy Works on the role of fun (aka motivational psychology) in “saving the world”.

OK, so maybe fun isn’t quite the right term – but what we do need today is more focus on values and culture in the finance sector – and fun isn’t a bad place to start!