The UK Financial Conduct Authority (FCA) has appointed Sacha Sadan as its first Director of ESG in a bid to step up on sustainability reporting and innovation.
Sadan will join the regulator from the country’s largest asset manager, Legal and General Investment Management (LGIM), where he was Director of Investment Stewardship for just under 10 years. During that time LGIM became well known for voting against executive pay packages and management at companies, as well as engaging heavily on climate change and gender diversity.
In an interview with Financial News last year, Sadan reportedly said he planned to stay with LGIM for the foreseeable future, adding: “I don’t want to do this job for any other reason than its influence.” But now he will join the Financial Conduct Authority, which monitors the conduct of nearly 60,000 financial services firms and financial markets in the UK, serving as the prudential supervisor for 49,000 companies and setting specific standards for 19,000.
An FCA spokesperson told RI that Sadan will start his position in the summer and report to Chief Executive Nikhil Rathi – another high-profile UK sustainable finance figure who joined the regulator last year from the London Stock Exchange.
In a speech yesterday, Rathi said the FCA would also widen the focus of its 'Digital Sandbox' project to include sustainability. The initiative allows innovative digital ideas to access regulatory expertise and be road-tested before being put out to the general market, in order to protect consumers from potential risks. He said the expansion to sustainability would be done in partnership with the Corporation of the City of London.
On the new appointment, Rathi said Sadan "will accelerate our work to encourage the development of a green, sustainable investment market, underpinned by investor protection and innovative use of data". RI understands that he will have a small ESG-focused team, and will work on the FCA’s approach to sustainable finance domestically and internationally.
Last year, the FCA came out in support of plans for the International Financial Reporting Standards (IFRS) Foundation to coordinate the development of international standards for sustainability reporting by corporates, saying: “We see a strong need for a global set of internationally recognised sustainability reporting standards and consider that the IFRS Foundation should expand its standard-setting activities into this area."
It has also been active in putting in place requirements for climate-related disclosure, in line with the UK government’s goal of introducing mandatory TCFD disclosures across the entire economy by 2025. For example, in December last year, the FCA introduced comply-or-explain requirements for premium listed companies to make climate-related disclosures.
Sadan’s appointment comes around one month after the regulator was asked in a letter of recommendations by UK Chancellor Rishi Sunak to “have regard to the government’s commitment to achieve a net-zero economy by 2050”.