IA outlines approach to climate change and nature-related policy

Written by Jack Gray

02/08/2024

The Investment Association (IA) has published its latest climate and nature policy report, outlining its approach to climate change and nature-related policy.

The report, Financing Transition, also set out the IA’s plans to “galvanise” effective policymaking to accelerate the transition to a low-carbon and climate-resilient economy, while protecting and enhancing nature and biodiversity.

To meet these objectives, the IA emphasised that a “significant mobilisation” of capital was needed.

The association called for increased focus on improving how firms conduct analysis of climate-related risks and opportunities, greater inclusion of nature and biodiversity-based commitments, and a strengthened commitment to the International Sustainability Standards Board (ISSB).

Its report highlighted the IA’s commitment to supporting credible, comparable and decision-useful environmental disclosures, and encouraging policymakers to ensure standards are meeting the needs of investors.

The association will also aim to foster a dialogue between investment managers and asset owners on material environmental policies, and support the development of a range of approaches to scenario analysis to explore risks and opportunities in climate-related financial disclosures.

Furthermore, the IA will seek to advocate for consistency and certainty in real economy policy to catalyse green investment opportunities, and improve public-private cooperation to enable greater use of blended finance and other models of transition finance.

“Our latest report underscores the UK investment management industry’s commitment to the goals set out in the Paris Agreement and the importance of clearly communicating the work our industry is doing to unlock the significant capital needed to support the green transition,” commented IA public policy specialist, Paul Scaping.

“Investors have a fiduciary responsibility to act in the best interests of clients and beneficiaries to ensure long-term returns on savings and pensions. As part of this strategy, investors will consider the long-term risks and opportunities associated with climate change and other sustainability issues.

“The IA will continue to drive constructive dialogue with policymakers and asset owners to ensure that the UK can remain a world-leading financial centre that contributes to a low-carbon and nature-positive transition, where investors can focus on building the financial resilience of investments and delivering long-term value.”

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