Advisers may have a difficulty identifying and comparing the sustainable focus of the firm’s they insource from and then communicating that to their clients, according to Mazars’ director of sustainable finance Paul Hamalainen.

When it comes to the awaited Sustainability Disclosure Requirements, the key aspect to be seen with the Financial Conduct Authority’s (FCA’s) implementation is pragmatism, according to Hamalainen.

“I think the pragmatism that the FCA has employed in thinking about the market ecosystem has been good for the industry.

“It is trying to think about the sustainable labels market from the point of view of what is going bring good outcomes for consumers.”

He adds that there’s always an “interesting challenge” for the regulator – wanting the rules to be specific, yet also not wanting the rules to be too rigid because the ESG ecosystem is still evolving.

“I feel that flexibility in the rules is very helpful,” Hamalainen says. “As things are constantly evolving, it’s a very nascent area.”

According to Hamalainen, the FCA’s sustainability support group for advisers is a “really good example” of the FCA saying “let’s not be a regulator that tries to deal with this slightly in isolation; instead, let’s involve the industry and help them find a way through what is a constantly evolving challenge at the moment”.

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