Background
The Charter was established in June 2020 having been announced in the UK’s Green Finance Strategy in July 2019. The Charter also forms an important part of the UK Government’s ‘Pathway to COP26’, leading to the global climate summit in Glasgow, Scotland in November 2021 and is supported by the Green Finance Institute. Details of the Charter can be found here.
Its founding members (comprising 12 Chartered and professional bodies in the UK and internationally) committed to integrate green finance and sustainability into their core curricula, new qualifications, and the continued professional development of their members.
The ACT is one of the 12 founding members, along with:
- Association of Chartered Certified Accountants
- CFA Society of the UK
- Chartered Alternative Investment Analyst Association
- Chartered Banker Institute
- Chartered Insurance Institute
- Chartered Institute for Securities & Investment
- CIMA
- Institute and Faculty of Actuaries
- Institute of Chartered Accountants of England and Wales
- Institute of Chartered Accountants of Scotland
- The London Institute of Banking and Finance.
What is the Charter
All signatories to the Charter are committed to:
- Engage members on climate change and environmental issues
- Curate, develop and promote relevant resources to members
- Encourage the adoption of relevant global and national standards, frameworks and guidance (PRI, PRB, PSI, TCFD)
- Engage with policymakers, regulators, researchers and practitioners to identify and promote impactful and effective best practices in green and sustainable finance and support national strategies
- Collaborate with other signatories, as well as domestic and international counterparts, to enhance and promote the integration of green and sustainable finance into academic and professional programmes of education and training
- Work with the Green Finance Institute to engage employers and encourage commitment to and the take up of green and sustainable finance programmes of initial and continuing professional development
- Report annually on progress in mainstreaming the principles and practice of green and sustainable finance.
What has happened since its founding?
Last summer, to celebrate the establishment of the Charter, a video was created. The ACT’s Chief Executive – Caroline Stockmann featured in the video which is available here.
Since then. the members have met on a regular basis and shared insights and challenges regarding implementing the Charter. It has been a great collaborative effort.
In June 2021, to celebrate the one-year anniversary, a series of discussion panels were held to coincide with London Climate Action Week. With help from the GFI, three events were held with the 12 founding members participating.
Each session had a different theme and covered:
- Transition Financing
- Disclosures
- Future Developments
The ACT hosted the final session and its Membership team played a critical role in managing the logistics of the event. The leaders from the ACT, CIMA and IoFA participated in a panel that was moderated by Carmen Nuzzo (Head of Fixed Income) from the UN PRI.
Key messages from the panel included:
- Treasurers are facing a plethora of reporting and disclosure regimes and a lack of consistency. For UK treasurers this may become more complex if the UK develops a taxonomy that differs from that of the EU
- That keeping below a temperature increase of 2% looks increasingly difficult and we do not know enough of what happens if we fail
- The recent Dasgupta Review highlights the importance of biodiversity and how different systems are all interconnected. However, unlike greenhouse gas emissions, it is harder to measure biodiversity and any damage being done
- Natural Capital is becoming increasingly important in attributing a value to benefits we derive from natural systems and how we can take steps to increase the stock of it
- Measuring economic success is more complex and requires an update in our traditional models. Methodologies such as weighted average cost of capital and capital asset pricing model may need to include new ways of measuring risk (either directly or indirectly)
- There is a wide range in current practices with large insurers undertaking complex modelling and reporting and other organisations still trying to establish KPIs
- Areas such as social and governance becoming more consistently measured and monitored and managed.
If you would like to get involved and help the ACT build its content on areas of ESG or participate in the debate, drop a note to technical@treasurers.org
