Green investment and scaling sustainable solutions

Recognising the importance of sustainable investment across the financial services industry, we look at how the UK-China Green Finance Taskforce, established in 2017, initiated the UK-China ESG Leaders Forum (ELF). 

The forum is a practitioner-led initiative to further embed ESG investing and green investment into the UK and Chinese investment community and to promote best practice to support British and Chinese asset owners and managers on their transition journey to sustainable asset allocation.

In October 2021, the ESG Leaders Forum released a report titled Scaling Sustainable Solutions – Public and Private Markets. It focuses on a global sustainable development solution and includes input from 28 asset owners and asset managers.

The report includes practices and real-world actions for scaling sustainable and green investment solutions. The report is jointly developed by City of London Corporation, Mercer, GoalsFirst and Three Hills Capital Partners.

The ESG report suggests that to achieve net zero goals, the investment management sector needs to combine outcomes and actions. 

• A sustainable development solution will reach scale when net zero goal setting is widespread and accompanied by clear outcomes and credible targets. 
• Taking a whole of portfolio approach to ESG investing is crucial to unlocking the inherent scale of fixed income markets and learning from leading impact frameworks within private markets, to fully realise the potential of investors’ portfolios. 
• It is important for the investment management community to work together to create the best green investment and sustainable investment solutions, taking a collaborative prototype approach to solution development. 
• The investment management sector must consider beneficiaries’ long-term goals in solution design and adopt a multi-disciplinary approach to creating innovative strategies and breakthrough tools. 

The ESG report is one of two that the ELF have released. The second, The Value Creation of Active Engagement, suggests that the creation of a transition map is important for both global players and emerging market leaders, like China, to drive positive social, environmental and market outcomes through a sustainable development solution and to help ensure an effective transition for their economies.