“Oh, no” was my first reaction when I was confronted with the recently launched UK initiative from the UK’s Investment Association called the Responsible Investment Framework. As a global asset manager with a focus on sustainability we need to apply to many different labels. In the last few years applying for the French label, the Belgian Febelfin label and the Eurosif transparency code has taken up much time across our organisation – time that could also have been spent on doing even more research into sustainability and engaging with companies. Even though I fully understand the need from a retail investor perspective, you can imagine I was not overly excited to see yet another initiative coming our way.
However when digging deeper, this UK framework actually seems to make sense. Why?
It starts with the three different motivations for implementing sustainable investing, which is the right basis to start from as the why question needs to be answered first before starting to think about how to implement.
The framework is focused on providing clarity to investors. Not a one-size fits all, but transparency on the different approaches that can be taken.
There is a clear firm-level component to it. What is the use of applying a sustainability approach only to 1% of your assets and do nothing in the other 99%? Of course it is up to all managers to decide what the level of ESG integration should be for all of their assets and to what extent products that go a step further need to be developed. However doing nothing for all other assets is not credible.
There is alignment with guiding sustainability bodies like the PRI and the Global Impact Investing Network (GIIN).
Most importantly for us, the common language and labels that are used are almost 100% aligned with the way we have already defined our fund range. On our website the funds and strategies are already categorized into: Sustainability Inside, Sustainability Focus and Impact Investing. Thank you UKIA!
P.S. I understand a label is still on the cards for the future. Some tips from my side: do not make it too prescriptive as this definitely leads to box-ticking! Also please keep the firm-wide part in, as I believe going back to a niche in sustainability is not what we need. But considering the framework that was just launched I have faith that the UKIA will get it right.
