Advisers should also take comfort from the EU’s work on a “taxonomy” for sustainable finance, according to Mr Fitzgerald.
The taxonomy is designed to define what kinds of activities are and are not sustainable for the purposes of investment strategies. The work will set out a European standard for how fund managers should assess companies, meaning there will be less scope for “greenwashing” by providers.
Mr Fitzgerald explains: “You can’t expect an adviser to carry out an environmental impact study for each client. They will probably rely on asset manager ratings – but for an asset manager to know how to rate [an investment], they will need to drill down. The taxonomy sets out 800 pages of technical details on how to test if the [investment] is environmentally sustainable.”
Wingate’s Mr Cunningham concludes: “The outcome [of Mifid II] is positive – the way we got there was not necessarily positive. [Providers] are not disclosing this stuff because they want to, it’s because they have to.”
Nick Reeve is a freelance journalist
