Financial Conduct Authority  

FCA on hunt for ESG experts to form committee

FCA on hunt for ESG experts to form committee

The Financial Conduct Authority is on the lookout for experts in environmental, social, and corporate governance to join its new advisory committee.

Announced by the FCA board earlier this year, the committee was set up to ensure the watchdog plays its part in the UK government’s target to have a net zero economy by 2050.

The regulator said today (August 23) it was looking for “a small number of external experts who have in-depth knowledge of ESG issues in the financial sector”.

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Those interested in being considered for the committee need to get their CVs into the FCA by September 16.

If chosen, they will be responsible for overseeing ESG issues relevant to the FCA - both as a regulator and as its own entity. They will also need to keep tabs on emerging ESG topics and develop the FCA’s ESG strategy.

The strategy, laid out in the FCA’s ‘Business Plan 2021/22’, was published in response to the Treasury’s expectation in its remit letter last year that the FCA "have regard" to the government’s commitment to a net zero economy by 2050 in all its regulatory activities.  

In mid-2021, the regulator hired its first director of ESG, Sacha Sadan, who previously spent 10 years at Legal & General.

He has a mandate to embed ESG considerations across the regulator itself and how it regulates.

But despite the watchdog doubling down on its ESG oversight, it seems many wealth managers - nearly half - are still not contacting clients about their ESG preferences.

An Oxford Risk study published today, based on data from the end of July, found 46 per cent of adults with investment portfolios managed by wealth managers have never been contacted  about their attitude to ESG or responsible investing.

The study also found that less than two out of five (37 per cent) adults feel their portfolio reflects their views on sustainable investing, and that nearly a third (31 per cent) would invest more if their portfolio better reflected their views on ESG.

Oxford Risk behavioural finance head, Greg Davies, said he found these results “surprising”.

“Advisers could be missing out, as substantial numbers of investors would consider investing more if their money was focused on ESG and responsible investing, something that we can help support as part of their advice suitability process,” he said.

Partner at UK law firm TLT, Paul Crighton, said the financial industry has been "crying out" for more regulation on ESG issues so firms can introduce more clarity and consistency in what they are doing.

"Presently, there is too much confusion about what different terms mean and while the industry has made a lot of progress, there is still a lot more than needs to be done," Crighton explained.

"The creation of an ESG Advisory Committee to the FCA could be a welcome opportunity to make sure any new rules are ambitious enough and practical, so that they do ultimately work in practice and make a difference. The focus needs to be on easing the way forward on ESG matters – not putting up more barriers.”