OPINION
By Simon O'Connor
Top 5 RI tips and trends
Simon O’Connor gives us an overview of the Paris PRI in Person conference and notes our region (Australia and NZ) is punching above its weight.
The world’s largest ever responsible investment conference was held in Paris last month, bringing together 1,700 investors at the annual PRI in Person. The conference addressed many globally relevant issues that are today more than ever shaping the world’s financial markets, all of which have relevance for the New Zealand market. It’s an important time, both globally and here in New Zealand, to remain on top of these latest practices, regulatory developments and to understand the role the finance sector will play in confronting the great challenges of our time over the decade ahead.
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My top five take-aways from the Paris conference are as follows:
1. THE WORLD OF RESPONSIBLE INVESTMENT (RI) HAS REACHED A NEW MATURITY AND ACHIEVED MAINSTREAM ACCEPTANCE, AND WITH THAT COMES A NEW LEVEL OF SCRUTINY AND REGULATION.
Whether it was the speech from the UK’s Minister for Pensions, that outlined their changes about to come into force requiring pensions to both report on ESG and to ask their clients of their ESG preferences, or France’s Minister for Finance, speaking eloquently about the critical role of a sustainable financial system in underpinning a prosperous French economy, responsible
investment is now firmly in the sights of key government ministries. And with this is rapidly following a new wave of regulation that will enforce minimum standards of responsible investment (think climate risk reporting as already being signaled by the NZX and FMA). The acronym soup was at times hard to keep up with (IOSCO, IOPS, ESMA, EIOPA, AMF, SEC, FRC, TEG, EIB, NGFS). But the message was clear: RI is no longer a nice to have; it’s being embedded in financial markets regulation across the world – pensions, insurance, banking and securities issuers – at an incredible pace. ESG will be required to be disclosed, managed, reported on, scenario tested, your clients’ preferences discussed, and built into default products (a live conversation in NZ with regards KiwiSaver default providers). One heads up is the International Organisation of Pension Supervisors which will shortly be launching guidance for supervisors on requiring pensions to integrate
