ESG Research: what challenges are fund boards facing?
/A report has examined the challenges facing the directors of funds and governance challenges as the world moves quickly into sustainable investing.
The report - Sustainable investment - nagivating the challenges for fund governance - was commissioned by the First Sentier MUFG Sustainable Investment Institute and researched and authored by the Fund Boards Council. The report has findings from interviews with 25 fund board directors in six countries: United Kingdom, Ireland, Luxembourg, Japan, Hong Kong and Australia.
The report examines the ways in which board members are looking at the oversight of sustainably invested funds.
Key findings include:
Boards are now required to consider many more levels of regulatory scrutiny, but also have a lack of clarity from regulators
Definitions are variable in the sustainable investment space, and regulations are evolving quickly, so experts are required
Some boards have low involvement in the oversight of fund performance in regards to sustainability objectives or characteristics
Fund boards may not receive management information on fund performance and how it relates to sustainability objectives, if in their fund mandate
The report examines the role of the board in several areas of governance, such as the delivery of commitments to investors, compliance with the law, risk management and how the board is comprised and their expertise.
