UK leads Europe in SRI

The UK leads Europe for sustainable and responsible investment (SRI) according to data from Eurosif, Europe’s sustainable and responsible investment membership organisation.

Eurosif’s eighth biennial study of the state of European sustainable and responsible investment suggests more investors are considering ESG factors when taking investment decisions across Europe, but this practice is particularly well developed in the UK. One example is the use of ESG integration, the policy of actively considering the impact of ESG factors in investment decisions, with the UK showing a 76 per cent growth, compared to 60 per cent in Europe overall between study periods of 2015 to 2017.

Another example is the €2.84tr of UK managed assets are voted at annual general meetings on sustainability grounds. This is the largest sum practising a single strategy in any single country in the study. From an already high base in 2015, the practice grew in the UK by 11 per cent to 2017.

Simon Howard, CEO of the UK Sustainable Investment and Finance Association said: "The study confirms the irresistible logic of sustainable investment: that money should be managed considering risks such as climate change, and exploiting positive trends such as recycling.”

The news comes as the UK’s Government and regulators step up efforts to manage ESG risks and promote sustainable finance. Earlier this month UK Government changed pension regulations to require schemes to consider ESG factors. The UK’s Prudential Regulation Authority is consulting on requiring banks and insurers to identify a senior executive to take charge of managing climate change risks, and the Financial Conduct Authority is consulting on measures to boost green finance products and improve the management of climate-related financial risks.

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