Regulators at the Financial Regulatory Symposium 2021 discuss the impact of COVID-19 on ESG & sustainability and business conduct in the investment industry

CFA Institute organized its annual Financial Regulatory Symposium last week where two key topics were discussed: ESG & sustainability disclosure and business conduct during the pandemic. During the two day event regulators – from the EU, US, Australia and Latin America – as well as practitioners and other stakeholders exchanged views on implementing lessons learned from the past to maintain trust, creating financial awareness amongst investors, and increasing investor protection on the road to economic recovery.

“The aim of the event is to be a leading discussion platform on regulatory and policy developments that effect the global finance and investment industry through the lenses of investor protection, business conduct and professionalism, which together constitute the cornerstone of the mission of CFA Institute,” said Sandy Peters, Senior Head, Global Financial Reporting Advocacy at CFA Institute.

During the first discussion, panellists debated on ESG and sustainability disclosures for investors and regulators. They underlined that Europe stepped up its work on ESG and sustainability disclosures with the Green Deal initiative, but that there should be jurisdictional alignment with a baseline of global disclosure standards such as those being developed by the International Financial Reporting Standards (IFRS) Foundation.

The second panel discussion focused on business conduct in the investment industry during the pandemic. Keynote speaker, Paul Andrews, Managing Director of Research, Advocacy and Standards at CFA institute, commented that “Investor trust goes to the heart of what makes financial markets work. The CFA Institute report from April 2020 Earning Investors’ Trust found that 67% of investors who do not have an advisor did not trust markets as opposed to 43% with an advisor.”

Andrews also referenced a follow-up study conducted by CFA Institute from March this year COVID-19, One Year Later: Capital Markets Entering Uncharted Waters, which found that the industry perceived regulators handled the crisis well.  “Investors and regulators are now demanding more on sustainability, but our main concern is about disclosure. For making the right investment decisions, disclosures and availability of data are major components,” said Andrews.

As moderator of the second panel, Josina Kamerling, Head, Regulatory Outreach EMEA, CFA Institute, stated that “COVID19 and the low interest environment have had an impact on trust erosion. These issues are not new but seemed to have increased in pace.”

“This increased further with online trading becoming more popular during the pandemic. The younger generation especially is turning to Apps and the online world. And our recent survey on investor trust shows that these younger generations trust technology much more, than would be a financial advisor, with all the consequences that come with this”, said Kamerling.

The event was held over two days and was attended by around 2000 people from around the globe. It included speakers such as Erkki Liikanen, Chair, IFRS Foundation Trustees, Janine Guillot, CEO, Value Reporting Foundation, John Berrigan, Director-General, Financial Stability, Financial Services and Capital Market Union, European Commission, Marcelo Barbosa, Chair, Brazilian Securities and Exchange Commission (CVM), Rients Abma, Executive Director, Eumedion, John Streur, President and Chief Executive Officer, Calvert Research and Management, Sandy Peters, CFA, Senior Head, Financial Reporting, Advocacy, CFA Institute, Olivier Fines, CFA, Head Advocacy EMEA, CFA Institute, Paul P. Andrews, Managing Director, Research, Advocacy & Standards, CFA Institute, Allison Herren Lee, Commissioner, US Securities and Exchange Commission (SEC), Cathie Armour, Commissioner, Australian Securities and Investment Commission, Laura Van Geest, Chair of the Executive Board of the Dutch Authority for the Financial Markets (AFM), Rui Pinto, Member, Board of the CMVM, Josina Kamerling, Head, Regulatory Outreach EMEA, CFA Institute. A full recording of the event is available here.