The UK Investment Association (IA), the trade body for open-ended funds, has launched a consultation into the ethical, sustainable and governance (ESG) fund sector.
The consultation will seek to agree a definition for ESG investing, and for the processes associated with investing in that way, including the term impact investing, and negative screening.
The consultation will seek to create a voluntary UK standard for ESG funds, IA hopes that this will help investors understand the nature of the product in which they are investing.
Chris Cummings, chief executive of the IA, said: “Social and environmental change is happening faster than ever before. The asset management industry is at a critical juncture in embracing sustainability as a defining feature of the investment landscape. “With sustainability and responsible investment becoming an increasing priority for today’s investors, this consultation is an important step forward in gathering the views of the industry with the ultimate aim of bringing greater clarity to savers.
Assets in ethical funds has grown from £4.5bn in 2008 to £16.9bn in the third quarter of 2018, but as a percentage of the industry they have almost stood still, moving from 1.2 per cent to 1.3 per cent, according to Investment Association data.