It is clear that the number of responsible and sustainable investment funds is only going in one direction: up. According to the Investment Association, UK retail investors poured more than £7 billion into these funds during the first ten months of 2020.
But legislation regarding environmental, social and governance (ESG) investing is less straightforward. In the void, multiple definitions, acronyms and industry body initiatives have sprung up, all working to define and monitor the booming number of ESG funds.
Without doubt, legislation is necessary, as Amy Clarke, chief impact officer at Tribe Impact Capital, warns: “In the absence of regulation, there is a growing sense that we may be approaching another product mis-selling scandal.”