For FBC corporate members, we are hosting a digital round table discussion on the SDR consultation, with the FCA’s Mark Manning, on 1 November 2022. Hosted by FBC senior adviser Brandon Horwitz, he will also be joined by Sandra Carlisle, Head of Sustainability at Jupiter and iNED Julie Patterson to address key questions around the consultation paper. FBC corporate members can register in the Member Portal here.
Carbon reduction clarity
The London Stock Exchange (LSE) has become the first major bourse to set listing rules for companies financing carbon reduction projects. Under the new rules, a fund or company would have to issue a prospectus vetted by the FCA that gives details of the carbon emission-cutting project it wants to finance. Read the full article, including comment from LSE Chief Executive, Julia Hoggett, in Reuters here.
ELTIFs agreement
A provisional agreement has been reached by the EU concerning European long-term investment funds (ELTIFs). The new rules claim to strengthen ELTIFs liquidity profile and promote portfolio diversification. Only time will tell if it has ‘legs’ on the continent. Find the full EU press release here.
Improving regulation
EFAMA responded to a European Securities and Markets Authority (ESMA) latest revision of MiFID II with a shortlist of key factors that could provide a framework for improved regulation. Find the full response here.
And in other news from the European Securities and Markets Authority (ESMA), it released research findings on the supervision of costs and fees of UCITS. The report concluded “satisfactory” levels of compliance with the applicable EU frameworks but highlighted some key areas in need of improvement. Find the full report here.
Marketing under the microscope
The plan by the Securities and Exchange Commission (SEC) to revamp the rules around fund names has investment managers up in arms, the FT reports here, and the commentary on the article at the time of going to press are worth a quick scan. The SEC’s aim is to crack down on misleading marketing by requiring funds to prove that 80 per cent of their holdings match their names, and it would apply to everything from “core” and “growth” funds to those that purport to invest in “sin stocks” or claim to rely on “ESG” factors.
Responsible Investment
As green as….gas?
Austria has filed a lawsuit against the European Commission over the classification of the gas and nuclear fuels as ‘green’ investments. This joins two separate legal challenges already made by Greenpeace and a coalition including Client Earth and the WWF. Read the details in the Financial Times (FT) here.
Meanwhile, the FT also reports, here, on funds being marketed as ESG by firms, such as BNP Paribas and Amundi, that have been found to hold polluting companies as collateral.
Governance challenges
For those wanting to address the challenges of ESG oversight, Investment Week, here, reports on Sustainable Investment: Navigating the challenges for fund governance, a new report commissioned by the First Sentier MUFG Sustainable Investment Institute and in partnership with FBC. The report highlights the governance challenges facing fund boards due to the rapid evolution of sustainable investment. Read the full report here.
Sustaining Advice
NextWealth’s latest Sustainable Investing Tracker Study found that advised client assets invested in sustainable funds and portfolios rose from 18% to 22% between April and August 2022. Reported on in Money Marketing here.
Stewardship step-down
In a concerning announcement, BlackRock is stepping away from stewardship responsibilities, declaring that investee companies are ‘best placed’ to decide net zero pathways. Read what Ignites Europe has to say here.
Ad-ding Impact
The Advertising Standards Authority (ASA) has ruled that HSBC misled consumers over the bank’s environmental impact in a 2021 ad campaign. Read the full article in Investment Week here.
Market Update
Streamlining
Incoming CEO of Jupiter Fund Management, Matthew Beesley, announced an overhaul targeting “subscale” funds that will see around 25% of Jupiter’s funds merged, closed or repositioned, impacting 4% of total AUM. Read the Investment Week article here.
Woodford saga
The FCA has ruled out making a report on the Woodford fund investigation public, unless the regulator takes enforcement action at the end of the process, reports the Investment Week here.
No beef for Axa
Axa IM will be prioritising vegetarian menus with locally sourced ingredients at events, eliminating red meat from menus where meat is served. This is part of their climate commitment, which includes a pledge to limit employee travel, reports Ignites Europe here.
Addressing inequality
A new Financial Reporting Council (FRC) report highlights the need for companies to develop strategies to reduce ethnic inequality in leadership roles. Read the report here, or grab a summary here.
Several of the news outlet cited in this blog require registration or subscription. Also, FBC takes no responsibility for the accuracy or quality of the news in the links provided above, and nor are the views and comments representative of FBC or its members, unless expressly stated. Content stored on the FBC portal is freely accessible for FBC members.
