Financial services firms expected to dump green finance and DEI
The financial services industry is taking a dramatic step back from green finance and diversity policies.
Over half of UK senior financial professionals believe their leadership will place less focus on environmental, social and governance (ESG) policies in the coming years.
Meanwhile, a similar proportion, 54 per cent, believe diversity, equality and inclusion commitments will become less of a focus in the near future.
The findings, from business information system CRIF, follow a global retreat from ESG and DEI policies since President Donald Trump’s return to the White House.
One of the President’s first executive orders included the removal of the US from the Paris climate agreement and Trump’s war on DEI axed roles across federal departments.
Banks leading green row back
The banking industry has pioneered the private sector’s pivot.
Barclays and NatWest dropped climate targets from their annual bonus schemes for senior executives and HSBC slapped a 20-year delay on its net zero target.
Sara Costantini, regional director for the UK & Ireland at CRIF, said ESG and DEI policies have traditionally been a “core component” of business practices in the UK and EU and are “bolstered by a strong regulatory framework”.
But British regulators have since taken a step back in a bid to spur growth.
The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) said in March after a “broad range” of feedback and “expected legislative developments” from the government, they would abort their push to regulate DEI.
This included shelving plans to “name and shame” companies facing investigations, which came under fire from the Square Mile, as well as Westminster.
City PM reported earlier this year financial hubs across the globe were ditching green finance with ratings of centres dramatically reducing in the 15th edition of Z/Yen Global Green Finance Index (GFFI).
Despite topping the index, London’s rating reduced 36 points to 598.