A strategy for positive change: the FCA ESG priorities

Undoubtedly, the past two years have shown us how important ESG is, with considerable investment directed toward this theme both in 2020 and the present 2021. The financial sector is and will continue to play a pivotal role in helping the economy adapt to a more sustainable long-term future. It’s, therefore, no wonder why ESG is high on the regulatory agenda, especially with all the ‘greenwashing’ noted in the press over the past several years.

On the 3rd of November, the FCA outlined its environmental, social and governance (ESG) strategy. The FCA’s previous strategy was built upon ‘transparency’ and ‘trust’ as identified in its Business Plan 2021/22; the refreshed strategy prioritises five main themes:

• Transparency – promoting transparency on climate change and wider sustainability along the value chain;
• Trust – building trust and integrity in ESG-labelled instruments, products and the supporting ecosystem; 
• Tools – working with others to enhance industry capabilities and support firms’ management of climate-related and wider sustainability risks, opportunities and impacts;
• Transition – supporting the role of finance in delivering a market-led transition to a more sustainable economy;
• Team – developing strategies, organisational structures, resources and tools to support the integration of ESG into FCA activities.

The refreshed themes build further upon the FCA‘s extensive work on corporate governance, senior manager responsibilities, as well as culture and purpose over the years. The FCA intends to deliver their strategies across these themes and will continue to develop its strategy with the changing landscape. The FCA will continue to provide additional detail as long-term objectives and priorities evolve. It is anticipated that these details will come from the FCA towards the end of the summer.

Check out the FCA publication here.