View more on these topics

Bailey: Passive and ethical investing can co-exist

Andrew-Bailey-Conference-Alt-2013-700x450.jpgPassive and ethical investing strategies have the capacity to co-exist, according to FCA chief executive Andrew Bailey.

Speaking at the Investment Association Culture Conference yesterday, Bailey said that the investment management industry might see a re-definition of what is termed “active” management.

Bailey linked two often contradictory trends in the investment management industry: raising popularity in passive investing, and environment, social, governance-oriented investing.

Some active management figures have argued that passive (or index) investing goes straight against ESG-oriented investment, as the lack of active management means that investors cannot opt out of their investments in case a company’s ESG ratings fall.

Bailey said: “A longer-term shift towards passive investing goes alongside a desire for more ethical and socially responsible investing and a desire to encourage longer-term patient capital.

Preparing for an all-passive world

“Of course, these two developments can co-exist. Indeed, I would go so far as to say that they will, and that in doing so there will be some re-clarification of the meaning of active investment.”

Bailey also said the regulator is looking to task institutional investors to report on how they are incorporating ESG issues into their investment strategies.

He said: “We are consulting on rule changes to require the Independent Governance Committees of contract-based pensions to report on how they manage environmental risks in their investment strategies and how they take into account the ethical concerns of investors.”

He added: “Industry which enables the support of patient capital and innovation, and of ethical investment and social responsibility, will be one where the trust will be stronger and deeper, and the culture will prosper. And, the regulator can help by enabling change to happen.”

Recommended

7

FOS hit with 300 pension transfer complaints since freedoms

The Financial Ombudsman Service has revealed it received 300 complaints relating to defined benefit to defined contribution pension transfers since 2015. However, this currently makes up 2 per cent of all pension complaints between April 2015 and March 2018, when the FOS received a total of just under 15,000 complaints on pensions and 1,700 complaints […]

File image of a pension savings pot
1

Pensions withdrawals hit close to £22bn

Nearly £22bn has been withdrawn since the pension freedoms started in April 2015 according to HM Revenue and Customs data published today. Savers flexibly withdrew just under £2bn from their pensions in the third quarter of this year which is down slightly from the £2.3bn taken out in the second quarter. A total 258,000 people […]

Tree - thumbnail
1

ESG progress following investor pressure

Roundtable on Sustainable Palm Oil members will vote next week on bringing in stricter criteria for companies seeking RSPO certification. Earlier this year, more than 90 global institutional investors, including Aegon Asset Management, Aviva Investors or M&G Prudential, urged the RSPO to strengthen its draft certification standards. In a letter to the RSPO Secretariat, investment firms […]

Standard Life Aberdeen investors want change of leadership

Institutional investors want to see Standard Life Aberdeen’s reigning duo out, according to a poll at Procensus – a platform for sharing opinion on markets. Two thirds of 21 surveyed investors, polled in a Procensus-organized research asked for Standard Life Aberdeen’s co-chief executives structure including Keith Skeoch and Martin Gilbert, would be scrapped. Skeoch and Gilbert have […]

2

Britain's “Forgotten Army”: The collapse in self-employed pension membership – and what to do about it

Pension scheme membership among employees has risen by more than five million in the past four years because of the policy of automatic enrolment into workplace pensions. But Britain’s army of 4.4 million self-employed people, who account for one in seven of the workforce, are not covered by automatic enrolment. Pension coverage among the self-employed […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com