That is difficult. Systemic problems are better suited to being dealt with by government.


Callum, are these systemic problems something you are discussing with your fund managers? Logan: Our schemes largely do not have caps on pension increases, so we are seeing a big rise in liabilities. That protects our members by increasing their pension in-line with the ris- ing cost of living. First and foremost, our focus is on delivering financial returns. A war created this and we are in the crisis phase. You need a government response here and they have capped energy bills, which is needed.


As investors, we can be more useful in the longer term, par- ticularly on the energy side. We have investments in wind and solar, but we are also looking at new technologies such as hydrogen. We have a private equity hydrogen strategy because electricity from wind and solar cannot solve all the problems in the transition to net zero.


Then there is a big discussion point about gas, which is the fuel driving the issue in Europe. We are on a transition and cannot get to net zero overnight. Gas has a place in that.


Is the EU’s ESG taxonomy helping investors achieve better outcomes? Jackson: The EU ESG Taxonomy is a reliable tool which trans- lates climate and environmental objectives into clear criteria. It will drive better outcomes because investors and those report- ing can learn from each other, creating a common language around green activities.


The taxonomy holds the industry up to higher levels of scrutiny, making it harder to get away with greenwashing. It will drive innovation within ESG, create a frame of reference for investors and hopefully accelerate projects which are already sustainable. It begins with reporting for me. That is perhaps because I am from an ESG data background. The added value is that those projects which can clearly articulate alignment with the transi- tion may be able to benefit from scaling up.


It is early days to say whether it will have real world impacts, but it has been widely adopted, is something that will continue to go in one direction and should help to augment investment in green projects necessary to implement the European Green Deal.


The taxonomy holds the industry up to higher levels of scrutiny, making it harder to


get away with greenwashing. Jacqueline Jackson, London CIV


Campbell: We are going to see less greenwashing because we have seen the damage it causes. We have seen offices raided in the last few months and likely large material fines for greenwashers. People are going to have to practice what they preach. Other- wise, action will be taken against them. You may get lucky. Lots of regulators are underfunded and do not have enough people to do the job they would like to do. You are running a risk if you do not follow through on what you claimed you are going to do. As well as regulators, some asset managers may be caught out by asset owners. Eventually, they will wise up to the fact that you are not doing what you claimed. Gopinathan: Regulation is a starting point. Disclosure is where it begins. That is an important aspect in becoming more focused on what the issues are and where the materiality lies. There is an important bridge between disclosure and deci- sions, where the translation and the contextualisation of that disclosure to the business and/or portfolios needs to happen in a bespoke yet consistent manner. Campbell: I am going to get nerdy – it depends where things appear in a set of accounts. In the US, under the SEC propos- als, something you see as ESG linked may appear in audited elements of the accounts. Whereas an awful lot of ESG metrics appear unaudited. Gopinathan: The eventual intent of regulation and regulatory disclosure is for positive outcomes. There is an intermediate bridge of contextualising, translating and making the disclo- sure meaningful. While regulatory disclosure at the start can appear to be a huge burden on resources and budget, it is


October 2022 portfolio institutional roundtable: Responsible investing 11


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