Investments: Environmental, Social and Governance Criteria

Lord Oates Excerpts

Wednesday 2nd March 2022 Lords Chamber

[Baroness Penn (Con)]

The noble Baroness is absolutely right. That is why the UK is developing an economy-wide regime for ESG disclosure, focusing in the first instance on those requirements related to climate change. Alongside that, the FCA is creating a consumer-facing label, so that consumers seeking to invest in ESG products know what they are investing in and that it meets the high standards that they would expect.

[Lord Oates (LD)]

My Lords, is the Minister aware of the comments made yesterday by the chair of the US Securities and Exchange Commission? He said of the ESG funds:

“When I think about these questions, I’m reminded of walking down the aisle of a grocery store and seeing a product like fat-free milk … in that case you can see objectives figures like grams of fat … Investors should be able to drill down and see the ingredients underlying these funds.”


What activity is the FCA taking to ensure that such detail is provided? Is there co-ordination with the Securities and Exchange Commission in the United States?

[Baroness Penn (Con)]

On the point about co-operation with the United States, I will have to check and write to the noble Lord. On the FCA, in addition to developing this consumer-facing label so that people can, with transparency, understand what they are investing in, it is also looking at the question of regulating the firms and providers that look at ESG ratings and providing that information also.