The Role of ESG Regulation in Sustainable Investing

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The role of ESG regulation also came up quite a bit during the event. There were discussions over whether there should just be voluntary frameworks to encourage sustainable investing or whether we need stricter regulation. I ask his staff what he thought. He talks about the EU climate benchmark regulation. Those rules set standards for low carbon indices in the EU. So I think that the regulation is an essential step in harmonizing the different sustainability and ESG products which we see on the market.

As extreme weather events such as Hurricane Ian intensify, the urgency of combatting climate change is increasing. The investment community is taking steps to make investment products low-carbon and reduce risk across portfolios. But what does that look like in practice?

In this episode of the ESG Insider podcast, we speak to two London-based investment managers on the sidelines of an S&P Global Sustainable1 event in London about what investors are doing to understand and manage climate risk in their investment portfolios.

We hear from Gustave Loriot-Boserup, Responsible Investment Manager at London LGPS CIV, which manages the assets of London’s Local Government Pension Scheme.

"We view ESG and climate risk as a systemic risk. So regardless of the investment product that we launched on our platform, we will expect all of our investment managers to have developed an appropriate set of resources to identify, to measure and to integrate ESG issues into their investment decision-making processes," Gustave says.

We also speak to Cathrine de Coninck-Lopez, Global Head of ESG at Invesco. She tells us that adaptation financing could be a major theme at the upcoming United Nations climate conference, COP27.

"There isn't a framework for how you define adaptation. Issuers don't really understand it. And that the financing right now is not there for it is obviously a huge problem in a context where the world is changing today," Cathrine says.

We'd love to hear from you. To give us feedback on this episode or share ideas for future episodes, please contact hosts Lindsey Hall (lindsey.hall@spglobal.com) and Esther Whieldon (esther.whieldon@spglobal.com).

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