Environmental, social and governance (ESG) investment regulations around the world are expected to experience a period of stronger enforcement over the next few years rather than additional regulation, Morningstar Indexes global head of ESG solutions, Catalina Secreteanu, has said.

Speaking at the Pensions and Lifetime Savings Association’s Investment Conference 2024, Secreteanu noted that there had been a “significant period” of increased regulation in recent years, and it was hoped the requirements coming into effect would allow asset owners to move together globally to a more consistent regime that would ensure strategies were more impactful.

“The most significant innovation and resources by the sector will be truly allocated to get this right, in terms of further enhancements of the climate strategies that we see in the market,” she stated.

“We have been experiencing a significant period of more regulation, and what’s expected by many of the players in the market is that over the next few years we will experience a period of stronger enforcement of existing regulation rather than additional regulation.”

During the session, attendees were polled on how they would like to continue with their climate engagements.

Nearly half (48 per cent) said they planned to do so as part of industry-wide group initiatives, such as Climate 100, while 45 per cent would like to engage on climate through their service provider.

Just 5 per cent of survey respondents wanted to continue their climate engagements through individual engagement with companies.

The same audience was also asked whether ESG should be renamed to “better reflect the work that those in the industry do”, with 63 per cent saying no and 37 per cent saying yes.

Of those who wanted a change of name, the most popular suggestion was to rename ESG as ‘sustainability’.

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