Tomorrow's Business Today
City watchdog does a great thing, shock
Which funds are allowed to call themselves “sustainable” or “green” and which are not?
Well, it’s a mess, is the short answer.
Investors have been heard to say that there are as many definitions of green funds as there are funds.
Also: their performance has lately been truly abysmal.
The fact that the funds are ill-defined might not be influencing performance, but it can hardly help. The feeling persists that the green investing industry is trying to pull the wool over investors eyes.
A help for the PR folk trying to sell green funds is coming, from a possibly unlikely source.
The Financial Conduct Authority recently published its guidelines for Sustainable Disclosure Requirements (SDR).
Funds sold to retail investors will have to meet certain criteria to qualify, which should at least bring some clarity. There will be three “green” labels.
Our friends at Liberum note: “Not only is this the first official fund rating system for sustainable funds in the world, but the UK regulator is also raising the bar for what can be defined as a sustainable fund.”
That would seem to put us well ahead of other regions, certainly the US, where almost anything goes.
If you believe what you read elsewhere, regulators, especially City ones, are just in the way of business being done.
This looks like a clear example of the regulator aiding sales. Don’t expect many people to say so.
Press release of the day
Fines on FTSE 100 companies jumped fourfold last year to £1.6bn says this from Thomson Reuters.
Mike Cowan says: “The aim of regulators has been to get fines up to the level where they are a real deterrent. Regulators like the FCA or SEC do not want fines to be seen as an acceptable cost of doing business.”
Thomson Reuters thinks regulators are taking a more active role post the global financial crisis. It could just be companies behaving more badly, I guess.
Stories that will keep rolling
1) Has US inflation peaked?
2) Are there signs of the UK job market wobbling? If so, is a recession now inevitable?
3) Is Begbies Traynor seeing insolvencies jump?
4) Could solar electric vehicles be the answer to long-distance driving