There has never been a greater focus on how well investment management firms deliver for their customers and for the wider economy. That to us means making investments that are a driving force for change – for our clients, their beneficiaries and the world we all live in.

We know that we can’t achieve this alone. We also know that responsible investment is no longer a special product, or even an option.

It’s a necessity, which our member firms deliver in a diverse and ever-evolving way.

The greater the number of investors that adopt this perspective, the faster positive change will happen.

IA Sustainable Finance Disclosure Regulation 
Published: 20 November 2020 
The IA has published its Sustainable Finance Disclosure Regulation Q&A. For the time being this is available to members only. IA members can use this link to access. 
The Q&A is intended to support firms in implementing the various rules surrounding sustainability disclosures. It focusses specifically on the EU Sustainable Finance Disclosure Regulation ((EU) 2019/2088 (“SFDR”)) with reference to other regulations, where relevant.
The Q&A is a compilation of questions commonly raised by members with a view to providing a steer to firms during the implementation process. The questions cover a range of issues. Specifically, they include clarification of definitions and scope as well as on details of the required disclosures. 

IA Climate Change Position 

Published: 16 November 2020
The IA has published its position paper on climate change. 
The paper sets out the industry position on climate change, recognising climate change as one of the greatest systemic risks of our times, and articulating the industry’s contribution to climate action alongside our specific asks of UK government.
Below is a summary of the commitments and asks agreed in the paper, which will drive our work plans ahead of COP26 next year.
Summary of Commitments and Asks 
On climate-related disclosure: 
  • Continued engagement with investee companies 
  • Reporting by large private companies 
  • Working together to help pension fund clients 
  • Investment managers’ own disclosures 
On empowering consumer choice
  • Improving sustainability-related fund disclosure
  • Linking with Net Zero initiatives 

On sharing knowledge and expertise: 

  • Supporting work of the Climate Financial Risk Forum
On working together with UK government to bring about transition: 
  • Supporting creation of investable opportunities 
  • UK government to make good on its intention to issue a green gilt next year 
  • UK government to facilitate sector-specific pathways to transition  
Sustainable Finance Regulatory Requirements Overview 
Published: 13 October 2020 
The IA has produced an overview of incoming regulatory requirements in sustainable finance to help firms navigate this period of extensive regulatory change. Please note this is a living document, subject to change pending future developments. 
The overview – Part 1 of the IA's “Fund Communication of Responsible Investment” – is intended to provide an overview and summary of major incoming regulatory change in sustainable finance, in particular, from the EU. With a particular focus on Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy, it is intended to help firms ascertain the extent to which their products are captured, what is expected of them, and by when. 
A dedicated working group on Responsible Investment Fund Language (“RI Fund Language Work Stream”) is tasked with taking forward proactive industry work on best practice guidance for the communication of responsible investment characteristics at fund level. This best practice guidance will constitute Part 2 of the Fund Communication of Responsible Investment, and builds on the IA's Fund Communication Guidance as well as on the IA’s Responsible Investment Framework
The Sustainable Finance Regulatory Requirements Overview can be found here
In case useful, here is also a link to a PDF of the timeline on page 6 of the overview. 
IA Responsible Investment Framework
Published: 18 November 2019
The IA has launched its Responsible Investment Framework.

The Framework categorises, and provides standard definitions for, the different components of responsible investment.
Clearly, interest in responsible investment is growing – from our industry, policy makers and regulators, our customers, and society overall. This can be driven by various different motivations, including:
  • To maximise long term returns;
  • To achieve particular sustainability outcomes (for example, investment in renewable energy); and/or
  • To reflect a particular set of values or beliefs.
But ultimately, this increased focus also comes from a growing awareness that we all – as individuals, investors, policy makers and businesses – have a part to play in promoting a more sustainable economy and planet.

The lack of a common language has been a significant barrier to date to the promotion and growth of responsible investment.
With the launch of our first ever industry-agreed Responsible Investment Framework and supplementary definitions, we have come together to bring clarity and consistency to the way we describe responsible investment products to our clients and to make it easier for all savers to understand the opportunities available to them.
This is a major collective step forward and we plan to build on it by working with policy makers, regulators, our customers and all relevant market participants on further signposting of responsible investment products and promoting awareness about the role investment management can play in bringing about a sustainable world.
For the Final Report, please click here to download.
Next Steps for Proactive Industry Work
As we look towards 2020, we look forward to continuing to facilitate industry collaboration with all key stakeholders to help promote and develop responsible investment. We envisage this to include:
  • Wider socialisation of the Responsible Investment Framework;
  • Publication of industry statistics in line with the Framework;
  • Establishing a new Working Group to consider:
  1. Use of language in relation to responsible investment in fund documentation (prospectus, KIID) with regard to non-financial objectives guidance in FCA Policy Statement PS 19/4;
  2. Reporting on sustainability, including on “principal adverse impacts” with respect to the incoming EU Disclosure Regulation;
  3. Further exploration of a UK retail product label.
Dynamic and fast-paced Public Policy Landscape

Industry is taking forward its proactive work in a dynamic and fast-paced public policy landscape. At the UK, European and global levels, we are seeing significant change and signals for change – via regulatory requirements and otherwise, including the use of industry codes and best practice.
Below are some of the major initiatives that the IA has been engaging with to date.
Global Initiatives 

UN Sustainable Development Goals (SDGs) (link)

The Taskforce for Climate-related Financial Disclosures (TCFD) Recommendations (link)
Change at a European Level 

The European Commission’s Sustainable Finance Action Plan (link to factsheet)

And its accompany legislative package, including:
  • EU Taxonomy (including the Technical Expert Group report from 18 June 2019)
  • Work on the EU Ecolabel for sustainable products
  • EU Sustainable Benchmarks Regulation
  • EU Disclosure Regulation
  • Changes to UCITS, AIFMD and MiFID to integrate sustainability risks and factors
  • Changes to the MiFID Suitability Assessment to include clients' ESG preferences
Shareholder Rights Directive II (SRD II)

Developments in the UK

Clarifying and strengthening trustees’ investment duties from the DWP (link) 

HMG Green Finance Strategy (link)
  • Including expectations around disclosures on climate change by 2022
British Standards Institution (BSI) work on responsible and sustainable finance standards (link) (link)
FCA Policy Statement (PS 19/4) and its reference to non-financial objectives (link)
FCA Feedback statement on climate change and Green finance  (link)

FCA Feedback Statement on Building a regulatory framework for effective stewardship (link)

UK Stewardship Code 2020 (link)

Impact Investing Institute (link)

Green Finance Institute (link)

IA Position Papers

Please click here for a list of the IA’s position papers on sustainability and responsible investment to date.
Front cover image for IA SRI Framework

Responsible Investment Framework Report

November 2019
Front cover of the Responsible Investment Framework

Responsible Investment Framework

November 2019