Sustainable finance moves further up the policy agenda
Environmental, social and governance (ESG) factors are becoming ever more essential for attracting investment. Lord Peter Hain and Dr Desné Masie survey the most recent trends. The post Sustainable finance moves further up the policy agenda appeared first on African Business.
Environmental, social, and governance (ESG) factors are becoming ever more essential for attracting investment. Lord Peter Hain and Dr. Desné Masie survey the most recent trends.
As sustainable finance incorporating environmental, social and governance (ESG) factors move up the global policy and regulation agendas, it is an area Africans cannot ignore and should lead on. It’s becoming an essential ingredient for attracting investment – a whopping $31 trillion of funding conformed to ESG/PPP criteria in 2018, and later figures will be even bigger.
It’s increasingly being adopted by pension funds, financial institutions, and big investors like BlackRock, and most important governments are nudging investors in the same direction.
The UK government has proposed that £5bn-plus ($7bn-plus) occupational pension schemes will have to disclose climate risks by the end of 2022. The European Commission will be requiring sustainable investment frameworks. While the EU – the biggest, richest single market in the world – doesn’t regulate corporate disclosures itself (that’s done by the 27 individual member states), it regulates financial services and has asked the sector to disclose its ESG footprint.
The devolved Welsh government is a pacesetter with its Well-Being of Future Generations Act, which requires all public bodies (including themselves) to factor in the long-term impact of their policy decisions, especially on PPP/ESG. That will influence not just its policies, but also its procurement, and impact upon the private sector too.