UK standard setter releases first national specifications for sustainable investment management

The body is also coordinating global standard setting efforts on the subject

The British Standards Institute (BSI), the county’s national standards setting body, has published the first UK-based standard for sustainable investment management.

The standard, titled ‘PAS 7341 Responsible and sustainable investment management – Specification’, sets out the policies and processes needed to create and embed responsible and sustainable considerations into the investment process. 

According to the BSI, PAS 7341 is based on “existing industry guidance, principles and regulatory developments”. The standard addresses five key elements: Governance and culture, Strategy alignment, Investment processes, Investor rights and responsibilities and Transparency.

Today’s release is a milestone for the BSI’s Sustainable Finance Standardisation Programme, a five-year long collaboration with the government’s Department for Business, Energy and Industrial Strategy (BEIS) and the UK financial services industry in support of the UK Green Finance Strategy. The Programme aims to “define globally applicable standards for the finance sector”.

“It meets a huge latent need to underpin commitments to responsible and sustainable investment with clear practical guidance” – Peter Young

The standard was produced by a steering group of experts which include Aviva Investors, Brunel Pensions Partnership, BEIS, the Investment Association, WWF and Vigeo Eiris among others.

Peter Young, Chair of the Industry Advisory Group for the Sustainable Finance Standardization Programme described the standard as both “ground-breaking” as well as “carefully complementing existing initiatives”.

He said to RI: “PAS 7341 is designed for both firms and individuals charged with managing funds and assets, it meets a huge latent need to underpin commitments to responsible and sustainable investment with clear practical guidance.”

In January, the BSI published a guide on sustainable finance which established a framework to help finance firms align themselves with global initiatives like the United Nations’ Sustainable Development Goals and the Paris Agreement. A forthcoming UK standard on sustainable finance products and funds is currently in the works. 

The BSI has also confirmed that the first draft of a global standard on sustainable finance is on track to be presented for committee approval in the third quarter of 2021. Work on the standard is being undertaken by the ‘322 Sustainable Finance’ Technical Committee at global standards body ISO, and is overseen by BSI as the Committee secretariat .

Last year, RI reported that an ISO working group had begun creating a “standard on sustainable finance” in China, in a bid to provide global guidelines for investors, banks, insurers, consultants, regulators and governments.