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Investment Apps Helping to Drive ESG Investing

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During the recent summit in Cornwall, Boris Johnson pushed G7 leaders to back a new climate change initiative to help developing nations reduce carbon emissions and slow global warming. The agreement he was promoting was to get the world’s leading economies to support significant large-scale renewable energy initiatives throughout areas of Asia and Africa.

However, he seems to have forgotten what is going on in his own backyard.

He also annoyed many with his comments that the UK would not support lifting patents on Coronavirus vaccines. Instead, he pointed out that the UK would be sharing knowledge as much as it could but tempered it by saying that we wanted to protect the incentives for innovation and that we would prioritise the selling of vaccines.

It doesn’t do much for the popularity of this country on the world stage, especially when you take into the fact that coming back to the global warming situation, UK financial institutions are lying ninth in the world table of nations, with carbon emissions at 805 million tonnes as of 2019. It is almost twice the figure of 455 million tonnes that the UK reported, which conveniently left out the Fintech sector.

In addition, it seems that instead of working together with other nations, Johnson has further angered other world leaders with recent remarks about Brexit. All in all, the UK is looking more and more isolated on the world stage.

Harking back to the so-called “special relationship” between the UK and the USA, Joe Biden has said that climate will be an important focus this year and that he will support any fiscal stimulus that is made in terms of green technology and new infrastructure.

Many companies are now adopting global standards as proposed by the Task Force on Climate-related Financial Disclosures. It will facilitate more informed investment decisions, which will bring things towards a new tipping point in terms of the climate change agenda.

New apps are being launched that gather sustainable investment data through artificial intelligence on a more real-time basis. Information regarding sustainability is now becoming more available. It will be further strengthened by new European regulations on sustainability-related issues in financial services, which will come into force in March 2022.

Clients will be given more transparency concerning their investments and current sustainability issues. It will allow them to put pressure on their investment managers to act in a more sustainability-friendly way, and this will knock on into the UK.

To bring more cohesion into the Sustainability Reporting Standards, several of bodies have produced a statement of intent that they will compare notes and work together on new frameworks. These bodies include:

  • The CDP Global Disclosure System
  • The Climate Disposal Disclosure Standards Board
  • The International Integrated Reporting Council
  • The Sustainability Accounting Standards Board
  • The GRI

In addition, the International Finance Reporting Standards Foundation, which Mark Carney, the ex-governor of the BoE, endorses, has also agreed to consult concerning the new Sustainability Standards Board.

Market Forces, the Australian environmental group, works to expose any financial institutions which invest in projects that are harmful to the environment. They help Australians to keep these companies accountable.

This group has previously singled out Barclays plc for criticism and has now said that they will put forward bank compliance and climate change targets to appear on the agenda at the annual general meeting of the Standard Chartered Plc body next year.

Another bank, NatWest, who are sponsors of the United Nations COPD 26 Climate Change conference to be held in Glasgow in November later this year, stated that its exposure in terms of investments in the fossil fuel market has decreased in the last 12 months, although this contradicts the figures published in the Climate Chaos report.

With the UK financial sector coming under fire, Nat West reported that its investments in the oil and gas sector had diminished by £800 million in the last year. They have said that they will cease lending or will stop underwriting major oil and gas projects if they do not have a credible transition plan conforming with the 2015 Paris Agreement by the end of 2021.

They went on to say that their fossil fuel financing portfolio represented only a very small portion of its overall lending strategy.

UK private investors can play a big part in the drive toward saving the environment if they become more aware of how their funds are being managed. Investment plans like the stocks ISAs offered by Moneyfarm are all part and parcel of a bigger picture.

If you feel that your fund managers are not acting in the best environmental interests of the planet, you need to speak up.

ESG or Environmental, Social and Governance initiatives are beginning to trend as new ESG apps are beginning to appear. The more investors who use these apps, the better. Not only do they highlight a socially responsible way to invest for the future, but if they help to diminish the involvement of the UK financial sector in “dirty” investing, it will help to make sure there will be a future.

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