- Data taken from a sustainable finance poll across 37 financial services (FS) firms with business interests and/or presence in the UK market in June 2020. Participants included 18 banks responsible for c.£15.1tn in assets, 5 insurers with AUM of c.£0.9tn and 14 asset management firms representing a combined AUM of c.£5.9tn
- Nearly all respondents (98%) expect the COVID-19 pandemic to change customer attitudes to sustainable finance
- But the majority (65%) believe that despite progress being made, the path to a lower carbon economy remains distant, and nearly a quarter (23%) believe very few FS firms currently have the appropriate level of focus on sustainability
- Senior FS executives believe that the current stimulus transmission programme should have “build back better” goals and requirements embedded as part of the criteria to receive funds
- And more than three quarters (76%) think that these goals should include climate change, societal value and governance targets to drive a sustainable recovery
- Regulatory requirements and the importance ascribed to sustainability by employees (up from fourth place in a January 2020 poll) were cited as the top drivers behind firms’ discussions on climate change risk, closely followed by increasing investor pressure on management
Gill Lofts, EMEIA Sustainable Finance Leader at EY, comments: “The COVID-19 pandemic has redefined society’s perception of ‘sustainable’, pushing climate concerns, societal value and governance targets ever higher up the agenda for a very broad range of stakeholders.
“While regulatory requirements remain one of the primary drivers behind firms’ focus on sustainable finance, the majority of banks, insurers and asset managers believe ESG goals should be integrated into financial stimulus policy through the economic recovery, and are experiencing increasing pressure from their own employees to engage further on sustainability.
“Sustainable finance, particularly the environmental component, has become an increasingly important priority among employees, within the boardroom and for investors. While evidence of change may not be immediate, the incremental steps we are seeing are meaningful and will form the building blocks of a resilient foundation across the financial sector for the long term.”