Blackrock backs calls for convergence of investment reporting standards
Blackrock, the world’s biggest asset manager, has called for a clear set of reporting standards for sustainable investments to tackle a ‘lack of clarity’.
There has been a significant uptick in interest in sustainable investments in recent years. Figures from the Investment Association showed what it termed responsible investment funds under management in the UK stood at £36bn at the end of August.
Industry bodies have released various frameworks to ensure reporting but Blackrock has said there remains a “substantial challenge” for investors to try and select the right reporting framework, let alone achieve alignment.
Currently regulations vary wildly across the world, detailing what companies need to disclose. The European Union has led the way with its Non-Financial Reporting Directive, which tells companies what types of data they should provide.
This week the UK government issued a set of standards for asset managers in a bid to shore up its green credentials.
The national standards body, the BSI, worked on the new set of standards alongside the Department for Business, Energy and Industrial Strategy, as well as representatives of the UK financial services industry.
In January Blackrock called on companies to enhance their reporting on environmental and social issues, but has since warned that the proliferation of initiatives has led to a lack of consistency.
Blackrock supports the framework proposed by the IFRS Foundation that would establish a sustainability standards board to work with existing initiatives.
“Better quality reporting and data would support more accurate asset pricing and enhance understanding of the drivers of risk and value in companies’ business models,” the asset manager said.
The asset manager currently advocates the TCFD and SASB reporting standards and said it would continue to do so until a global standard is established.
The call came as part of Blackrock’s Investment Stewardship report for the third quarter which showed it had undertaken more engagements over the period despite Covid disruption. It held 559 engagements – a 21 per cent increase compared to the same period last year – with 490 companies on ESG issues.