Sustainability and ESG have made huge strides recently and are growing in both popularity and necessity within the wealth management industry. Despite this, its critics are still vocal. Some do make valid points.

There is a distinct lack of consistency across ESG metrics and many products are not as “green” as they perhaps claim to be.

This week has offered some hope in this regard. The regulator and government finally seem to be catching up with the problems and are at least trying to make positive changes.

Firstly, the UK’s 2023 green finance strategy was revealed. This is a hefty piece of work, which the FCA, other regulators and multiple government departments have all had a hand in producing.

Optimists hope the plans could be a key step to unlocking capital markets’ potential to accelerate net zero aims and establish the UK as a green finance centre. 

While there is still much to digest, I believe we should be positive about the strategy. At the very least, it shows the UK is trying when it comes to sustainability and no longer ignoring the issue.

The onus must be on the financial services industry to drive the strategy forward and accelerate its sustainability goals and credentials to help make it a success.

Secondly, the UK government has launched a consultation on extending the FCA’s perimeter to cover ESG ratings providers.

The idea of this is to tackle the issue of ratings transparency, including in regards to methodology, underlying data and objectives.

Many hope this will lead to a more rigorous approach to ESG ratings and allow clients and investment managers alike to have more faith in the information they receive from these agencies.

Of course, this is just a consultation, so it may not even be implemented. But it does feel like a step in the right direction.

The need for urgent and meaningful action on the environment has never been clearer. Even if these steps are small, with industry support, they have the potential to start making a real difference.