• Leadership and purpose: It is important for businesses to lead by example and demonstrate the values consumers seek. The impact of Covid-19 makes it even more important for companies to incorporate ESG principles into their own operations and conduct, not just their investment decisions or advice.
• Consistency and communication: Using internally consistent sets of ESG definitions and assumptions, aligned to global regulatory standards, will help to build a robust ESG framework, make performance comparisons and build trust and transparency with staff, investors and stakeholders.
• Training and culture: Training, education, leadership and culture are all essential to fully implementing ESG frameworks, and to increasing awareness of the benefits of responsible investing.
We expect regulatory change, evidence of no detriment to returns and fast-growing demand to drive sustained growth in responsible investing.
Meeting those needs will generate powerful revenue growth for financial advisers and asset managers. Those that fail to keep up risk being left stranded as the whole industry shifts onto a more sustainable footing.
Lorna Blyth is head of investment solutions at Royal London Intermediary and Gareth Mee is a partner – sustainable finance consulting at EY