Financial Services and Markets Appendices to the Minutes of Evidence


Memorandum by World Wide Fund for Nature (WWF)

  I am writing to highlight a number of concerns in relation to the above draft bill. I hope that, as Chair of the Joint Scrutiny Committee considering this proposed legislation, you will consider these concerns in your deliberations.

  WWF (World Wide Fund for Nature) is the world's largest and most effective conservation organisation. We believe that the draft bill in its current form is a missed opportunity.

  Financial services have a highly significant impact on the environment. Five hundred of the world's largest businesses currently control 25 per cent of the planet's output in terms of GDP. Among the world's top 100 economies in 1995-96, no fewer than 51 were businesses and 49 were countries. These businesses are at the core of global environmental concerns, yet they could be a force for positive change rather than destructive practice.

  WWF believes that socially responsible investment has enormous potential to conserve endangered species and habitats, and to change the way business and industry operate. It is highly disappointing, therefore, that the draft bill fails to make any reference to the way in which regulation of financial services and markets could help to promote sustainable development, as highlighted by the Rio Earth Summit in 1992.

  There are a number of ways in which WWF believes the draft bill could be amended to do this as follows:

    —  It should include an explicit requirement to ensure that the financial system promotes and enhances sustainable development.

    —  It should include provision to enhance public understanding of the impacts of their investment on individuals, society and the natural environment—impacts such as climate change, acidification and deforestation. The draft bill already has a focus on "public awareness and the protection of consumers" which WWF welcomes, given the increasing number of consumers who have ethical, social and environmental concerns. However, this could be strengthened to "incorporate the right for consumers to know that their investments may conflict with their principles."

    —  It should include provision to protect green and ethical consumers. Protection of consumers is already referred to in the draft bill (see above) but it does not reflect the differing degrees to which consumers wish their social, ethical and environmental concerns to be taken into account. While surveys show that many people would wish to invest ethically, few have heard of the option. WWF believes that consumers have a right to know this option exists and that the Financial Services Authority should issue guidance to Independent Financial Advisers to ask consumers about their concerns on these issues.

12 March 1999

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