The city’s regulator, the Financial Conduct Authority, appears determined to stamp out endemic “green money laundering” in the investment fund industry. In other words, to prevent investment companies from using misleading documents to present investment funds as environmentally friendly or green when they clearly are not.
Last month he presented his proposals to clean up the multi-billion pound sector with better labeling of funds.
Then, a few days ago, he detailed how he would go about overseeing rating agencies that provide ESG (environmental, social and governance) data on individual companies that groups of funds rely on to build green investment portfolios.
Hidden Agenda: “Greenwashing” is where investment firms use misleading literature to dress up investment funds as environmentally friendly or green when they clearly aren’t
The regulator’s decision is welcome because the data provided by these agencies is at best unreliable and random in nature.
It’s a point investment expert Alan Miller made eloquently earlier this month in an article I wrote about ESG.
It analyzed the ten largest “sinful” stocks in the FTSE100 index operating in the oil and gas, alcohol, tobacco, mining, defense and gambling sectors.
He found that these stocks – Shell, Diageo, BP, Rio Tinto, BAT, Glencore, Anglo American, BAE Systems, Imperial Brands and Flutter Entertainment – had a better average ESG score than the FTSE100 as a whole according to a leading ESG data providers. (Refinitive).
He was stunned. He said: “How crazy that a tobacco company like BAT is ranked as the third highest ESG rated company in the FTSE100 Index.” In effect.
Although the FCA wishes to regulate these rating agencies, this will not be done in a hurry (it would require the intervention of the Treasury).
Thus, the FCA wants agencies to adhere to a code of conduct that would make ESG ratings fit for purpose.
Good in theory. But in practice, that won’t happen – despite all the good intentions of Sacha Sadan, FCA’s passionate environmental, social and governance director.
Indeed, the code will be developed by a group co-chaired by investment group M&G, the best lawyer in town Slaughter & May, Moody’s and the London Stock Exchange Group.
The first two are correct, although why M&G gets special treatment above all other investment houses remains a bit of a mystery. M&G and ESG are not natural bed partners.
The latter two are respectively a rating agency and owner of one (Refinitiv).
Thus, the rating agencies will define how they should behave in the future. Oh good?
Miller’s reaction? “Simply amazing,” he says. “A recipe for conflicts of interest to abound.”
The opposite, I guess, of turkeys voting for Christmas.
Tortuous journey for the economy
Many thanks to the readers who took part in The Mail+ post-budget survey that appeared in Wealth & Personal Finance seven days ago.
To readers who did not participate, we asked two questions: was the government right to increase the state pension by inflation – and similarly, was it right to freeze income tax thresholds?
On the first question, more than nine out of ten readers thought that an anti-inflationary increase in the state pension was the right decision. On tax thresholds, readers’ opinion was understandably more divided – with a small majority in favor of the freeze policy adopted by Chancellor Jeremy Hunt.
Hopefully the government’s policies will get the UK economy back on track, sooner rather than later. It will be a torturous journey, much like a train ride.
Jingle Bells socks saved the day…
Making people smile is not part of my job description. But I was reminded of its therapeutic effect last week when I met Santander’s media relations team for an egg on toast and black coffee at Wolseley in London (not a celebrity in sight, even if it was early in the morning).
The team is led by Miranda Seymour, a lookalike of Barbra Streisand in her heyday. Barbra, sorry, Miranda reminded me of an interview I did with Peter Wood, founder of Direct Line, 30 years ago, at which she was present. At the time, Direct Line was making waves in the car insurance market with its bold advertisement featuring a four-wheeled red telephone.
Put them on: buy singing socks for Christmas and put a smile on someone’s face
Apparently Peter was in a bad mood before the interview and had said so verbally to one of the staff present. The omens were not good. But I bowled while wearing a pair of Christmas socks that played a refrain of Jingle Bells if pressed in a certain place. Yes, it was Christmas, I was young and desperately trying to make a name for myself in the cutthroat world of personal finance journalism.
Peter spotted the outrageous socks as soon as I entered the room – and I duly let him listen to them:
‘Oh, jingle bells, jingle bells
Jingle All the Way
Oh, what fun it is to ride
In a one-horse open sleigh.
Peter couldn’t help laughing. The atmosphere changed in an instant and Miranda heaved a heavy sigh of relief. The interview went very well.
Moral of the story: get some singing socks for Christmas and make someone smile.
You will find a very nice selection on: redbubble.com/shop/musical+santa+socks.
The marathon man is one in a million
By the end of 2022, Gary McKee will have run 365 marathons – one marathon a day. A remarkable achievement: the equivalent of running from the UK to Australia.
Like the Herdwick sheep that roam the Lakeland hills east of where he lives in Cleator Moor, he is a hardy soul. So 331 less marathons, 34 remaining.
In his early 50s, Gary managed to get this far because he’s a hard core; has a large group of friends who took turns running with him; and has a supportive employer who allows him to run in the morning (he tends to start running at six) and then work later in the day.
This phenomenal running machine has so far raised over £251,000 for Macmillan Cancer Support and Hospice at Home West Cumbria.
Helping people less fortunate than him is his main driving force (he has already raised a lot of money for Macmillan).
You can help her Herculean effort by donating at: justgiving.com/fundraising/threesixfive. Don’t forget to add Gift Aid.
His mission, he says, is to raise £1m.
Knowing the courage of this individual, I would not be surprised if he succeeded.
RMT doesn’t care
Tough talk: RMT boss Mick Lynch
Other strikes have therefore been announced by the RMT, a union that does not care about customers who indirectly pay their wages to its members through exorbitant train fares.
Last week, GWR staff added to the misery of customers by deciding to go on strike of their own, throwing my commute to work into chaos.
I managed to get down to business using an alternative SWR service – although it was not without its own issues. A lack of cleaners meant the guard on the first service departing Wokingham on Tuesday morning had to apologize for the neglected condition of the train.
And to say that so far the only compensation I have received for all the inconvenience caused by bolshie unions over the last few months is a check (yes, a check) from SWR for a miserable £3.03.
To RMT boss Mick Lynch, above: Stop playing politics with our railways and get your members back to work.
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