The UK's Financial Conduct Authority (FCA) is looking for people who are not employed by firms regulated by itself to join a new ESG Advisory Committee to its board, as the organisation moves further to execute ESG-related responsibilities such as 'having regard' to the UK government's net zero objectives.

The new committee's role will be to advise the board on:

  • How it executes oversight of ESG issues relevant to the FCA both as a regulator and our own operations,
  • Relevant emerging ESG topics or issues,
  • How the FCA should develop its ESG Strategy, in keeping with the organisation's statutory objectives and regulatory principles.

The FCA states that: "The committee's membership will include a small number of external experts who have in depth knowledge of ESG issues in the financial sector."

"Members will be appointed by the board in a personal capacity and will need to abide by a conflict of interest policy. We do not expect people currently employed by FCA regulated firms to be appointable to the committee. We will also ensure diversity of the members of the committee, in line with our commitment to promote diverse and inclusive financial services."

The FCA suggested the new committee would meet for the first time in Q4 this year, and then quarterly thereafter. It may meet more frequently "where necessary". The FCA board will appoint the committee chair and provide secretariat support.

Commenting on the news, Paul Crighton, partner at UK law firm TLT, said: "The industry has been crying out for more regulation on ESG issues, in order to introduce more clarity and consistency in what firms are doing. Presently, there is too much confusion about what different terms mean and while the industry has made a lot of progress, there is still a lot more than needs to be done."

"The creation of an ESG Advisory Committee to the FCA could be a welcome opportunity to make sure any new rules are ambitious enough and practical, so that they do ultimately work in practice and make a difference. The focus needs to be on easing the way forward on ESG matters - not putting up more barriers."