Emma Bickerstaffe Focus on ESG has grown rapidly in recent years as new generations of investors and consumers have come to demand business does its part to protect our shared environment . This is undoubtedly a good thing , however , we are now seeing the fallout from a lack of consistency , global standards and regulation .

Regulation is necessary , but diverse regulation can be difficult for investors to navigate , especially those who might be working across multiple jurisdictions .

Over time , we will likely see a degree of regulatory convergence across different jurisdictions , for example with the EU ’ s Corporate Sustainability Reporting Directive ( CSRD ). While this regulation only applies within the EU , its impact will nevertheless be felt globally as businesses from outside the EU fall within scope .

The best approach for businesses looking to navigate these intricacies is to build internal knowledge , put the operational foundation in place to monitor ESG data , ideally set targets and consider what initiatives you might embrace to improve performance year after year .

John Stephens The UK has already established a new way of creating financial regulatory policy and implementing regulatory rules . Under the Financial Services and Markets Act 2023 , there is a clear division of responsibilities between Parliament and the financial regulators , which helps

to enhance transparency and accountability requirements for the Financial Conduct Authority ( FCA ).

With this in mind , the regulatory environment continues to evolve , and the expectation is that there will be more regulatory involvement in not only the traditional areas such as capital and liquidity but also emerging areas such as innovation and financial technology .

We can already see this taking place through regulatory agencies in the US , including the Federal Reserve Board ( FRB ).

The current areas of focus going into 2024 include matters involving bank-fintech partnerships , AI , digital assets and tokenisation , as well as other

116 February 2024