Skip to main content

Business Committee to examine ESG and rise of ethical investment banking

6 October 2022

The growing, global market for Environmental, Social & Governance (ESG) investing will be examined by the Business, Energy and Industrial Strategy (BEIS) Committee on Tuesday, 11 October.

ESG refers to investing in organisations or assets based on ethical considerations rather than primarily on financial return.  

The rise of ESG has spurred debate about how to rate assets’ compliance with various standards, particularly around issues relating to pollution, climate change, impacts on biodiversity, corruption, and human rights.  

In different parts of the global economy there are emerging systems of regulation for how companies should disclose data on their own performance against such standards so that they can be valued in a robust and consistent way. 

In the UK, regulations on mandatory disclosures have been introduced by the Prudential Regulation Authority (PRA), the Financial Conduct Authority (FCA) and The Pensions Regulator (TPR). The UK has also introduced a system of mandatory disclosures that were developed by the Task Force on Climate-related Financial Disclosures.  

The Committee will question witnesses, including from regulators and academics, on how ESG is influencing investors, and how its systems for reporting and auditing could be improved. 

There may also be questions about the extent to which companies may be using ESG disclosures to mislead or “greenwash” investors about the extent to which they behave ethically. 

Interest in ESG investing has followed observations that firms that perform strongly across all three factors of ESG outperform the market and generate longer-term value. A recent global survey by McKinsey found that 83% of high-ranking investment professionals believe ESG programs will generate more shareholder value in five years’ time than they do today. 

Witnesses

Tuesday 11 October in Committee Room 8, Palace of Westminster

At 10.15am

  • Emma Wall, Head of Investment Analysis and Research, Hargreaves Lansdown 
  • Dr Aneesh Raghunandan, Assistant Professor of Accounting, London School of Economics
  • Joanna Allen, CEO of Graze; campaigner for Better Business Act 

At 11.00am

  • Richard Spencer, Director of Sustainability, Institute for Chartered Accountants in England and Wales 
  • Kate O’Neill, Director of Stakeholder Engagement and Corporate Affairs, Financial Reporting Council
  • Ingrid Holmes, Executive Director, Green Finance Institute; Chair, Green Technical Advisory Group

Further information

Image: Parliamentary copyright