Simon Goldie, Director of Advocacy
In two weeks we will be celebrating the winners of the FLA’s first ESG Awards at our 2023 annual dinner. The awards recognise an exemplary commitment to ESG, in particular net zero. We launched the awards because it is important to champion what our members do and the contribution they make above and beyond funding the UK economy and the value that brings.
Over the last few years, environmental, social and governance reporting has become increasingly important to businesses, regulators and politicians. A quick search on Google for ESG returned 509,000,000 results. To put this in some sort of context, a search for Taylor Swift gives you 382,000,000.
ESG matters. Regulators and investors are asking member firms to report on ESG with a focus on the environment and social. Companies that are required to report are having to think differently to the standard profit and loss accounting that was the indicator of success. Now businesses need to think about carbon emissions, the impact of what they are funding and how to measure all of this sensibly. This would be helped by an objective, government-led, benchmark of what is an agreed green assets and what is a societal good.
It would be wrong not to acknowledge that there are tensions between the environment and the social. Even within environmental reporting there are challenges. For instance, when measuring carbon emissions for electric vehicles do you look at emissions by the vehicles or the carbon it took to extract the components of the battery, the disposal of the battery and the manufacture of the car? What if the mining of lithium was done by slave or child labour? There are not easy answers to these challenges. It will take everyone working together to resolve them.
For our part, it isn’t enough to recognise excellence, important though that is. This year, we will be doing more work with our members on the new rules around ESG reporting and setting out for members how to develop an ESG strategy. We will also press the Government for a coherent plan to transition to net zero, for a risk-sharing scheme between government and lenders and a cross-Whitehall taskforce to make sure we really do have a thought out and joined-up public policy approach.
Published 08 Feb 2023