There have been two recent changes that will affect how ESG is applied in practice by fund managers, advisers and, most importantly, investors. Lee Coates of ESG Accord has been advising on ethical investment for three decades, runs a consultancy to help others implement ESG and and is on a relevant FCA committee. We had such a great discussion that we are giving it to you in two parts: this is the second. You don’t need to listen to the previous episode first, but it will help.
In this part, we start by discussing the new Sustainable Disclosure Regulations that are coming. While there is a lot of focus on the labelling, and it is important, Lee believes the disclosures will have a deeper impact. We discuss what they are and how that will affect what managers do.
Greenwashing is obviously a concern. Lee talks about some of the ways this is happening, not all of which are malicious. We also discuss measurement, some of its challenges and how that will fit in with the new labelling.
Finally, Lee looks at how things are evolving and how we might get to a world where we don’t talk about ESG because it is implicit in what everyone is doing.
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Lee Coates, Director of ESG Accord, launched the IFA firm Ethical Investors in 1989, which dealt exclusively in ethical and responsible investment advice. In 1998 Lee launched the independent ethical research company Ethical Screening. In 2010 he launched Australia’s first animal-friendly superannuation fund ‘Cruelty Free Super’ and was awarded an OBE for Services to Ethical Business and Finance in 2011. In October 2020 Lee co-founded the ESG Accord, supporting advice firms to implement robust compliance procedures to meet client investment preferences and objectives, including ESG and sustainability. Lee is part of the FCA’s Disclosures and Labels Advisory Group.