Is the City facing into a more purposeful future driven by greater transition to sustainable incomes for its populous, or a new panacea of deregulation to compete globally?

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Direction needs momentum, which is contingent on politics and trade deals. Indeed, many hope the UK might emerge as a fiduciary leader; yet the certainty of whether the UK deregulates or gold-plates in a post-lockdown-post-Brexit world is capricious. For example, the key parts of the UK pension model are being rapidly aligned (at least in principle) to a more sustainable model, including”

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• An increasing sense of big society and purpose for pensions. This has crystallised around the Make my Money Matter initiative by Richard Curtis and Mark Carney. The new campaign asserts that ‘the effect of where you invest your pension is 27 times more powerful than any other decision you make.’
• Greater clarity of provider duty of care. In 2018 the Law Commission had already connected fiduciary responsibility and sustainability for pensions. This drove a series of reviews by DWP, the Pension Regulator, PRA and lastly the FCA through 2018-2019 and a new responsible investment framework from the IA.
• Sharper focus on transparency, data and reporting. The fact we are in the later stages of adopting new reporting under the Task Force Climate-related Financial Disclosures (TCFD) simply means there is both clear public awareness and detailed substance for; asset owners, fund managers and the companies they invest.
• Linking sustainability to systemic stability. The Bank of England Climate Hub had already been increasing its volume that ‘climate risk’ is a risk to prudential firms. Any bias towards sustainable factors has a direct bearing on prudential regulation and can change the shape of the economy.

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