None of the information provided is investment or tax advice.
You should always read the associated risks before deciding whether to invest. These can be found on the product pages as well as in our risks overview.
Please confirm you have read the information above.


Welcome to Downing LLP


Request information for

Product Offer Hero Title

Hello, thanks for your interest in investing with Downing. Please complete this form to receive the requested information.

Did you know. Risk warning. Take 2 mins to learn more.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
plus icon
document search icon 3
min read

ESG - Many puddings are in the oven, and we’re waiting for the proof

No items found.
Roger Lewis
Roger Lewis

Head of Sustainability and Responsible Investing

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.


  • asd
  • asd
  1. asdasd
  2. asd
  1. asd


Environmental, social and governance-related investing

It’s time for a stock take. Environmental, social and governance-related investing is hot on the lips and touted as a key component in mitigating climate change. Downing’s Head of ESG, Roger Lewis, reviews progress from the first half of 2022.  

There are two things to remember from the first half of the year: progress continues and the destination is still quite a distance away. 

Net, not gross, zero carbon 

Coming up to three years of age for some asset classes, multiple methodologies and targets have been released for the 2050 target of net zero carbon emissions for investments.  This ranges from the first wave of the largest asset managers committing to the Net Zero Asset Management Initiative (NZAM) just before COP26, to the fifth wave of signatories that brought the total committed to the NZAM up to $61 trillion of total assets under management (AUM). 

Despite this large total, data published in the first half of 2022 from the UN Environment Program Finance Initiative and IPCC showed that net zero asset manager commitments are yet to deliver meaningful emissions reduction. Total emissions from human activity in 2021 did not trend downwards and instead rose slightly above the 2020 level of 60 billion tonnes of carbon dioxide equivalent. Furthermore, another two parts per million of greenhouse gases (GHG) were added last year, meaning there are more molecules in the atmosphere that trap heat. 

There has been progress on commitments, targets and reporting, though little on real-world emissions. To achieve urgency, data needs to be collected for each asset within a fund and then a steep and comprehensive reduction of emissions. We have often seen that voice (engagement) is preferred over exit (divestment), so to achieve integrity, carbon removal or sequestration should be considered for cumulative and new emissions.  

Carbon offsets ought to be used only at the end for the small remaining emissions that an investor or company is responsible for. Given the ‘wild west’ and ‘price is too low’ criticisms that offsets receive, there has been some debate in the first half of 2022 about regulated markets, similar to other financial instruments.  

The green energy transition 

A close relation to net zero is the green energy transition - the UK, EU and US have been particularly active in this area so far this year. 

The UK Committee on Climate Change published its annual critique on the UK meeting its legal decarbonising obligations under the 2008 Climate Change Act. Some areas show good progress: credible emissions reduction plans for two-fifths of the target and a solid net zero strategy that covers power, oil & gas, industry, transport, heat and buildings. Others do not: no plans relating to emissions reductions in some sectors and policy gaps for land use and energy efficiency.  

Relating to the EU, Brussels has laid out many supplements to the Green Deal strategy. This includes committing to spend on research & innovation in climate-tech and clean-tech, and also accelerating the blended finance partnership between public and private investment. 

The EU also announced the newly commissioned RePowerEU Plan, which will reduce energy dependency on Russian fossil fuels - important progress that will aid European energy security and tackle climate change. However, the debate surrounding the carbon border tax on imports such as steel from India continues. 

The US is the second largest emitter of GHGs after China and is home to the world’s largest companies. The U.S. Securities and Exchange Commission’s Climate Disclosure Rule draft introduced in April 2022 was therefore a milestone. With the introduction of this rule, just like audited financial statements are a legal requirement, audited GHG emissions will now need to be disclosed by companies. While not final yet and subject to consultation and lobbying, the rule nonetheless provides clear signalling of the regulator’s position on climate disclosures. 

Research making leaps forward 

Throughout the year, scientists on the Intergovernmental Panel on Climate Change published their latest research findings in the sixth assessment report, or AR6. The research benefits from greater accuracy due to technological advancements, which include computer simulations, satellite measurement for methane, ground weather stations and probes to record GHG concentrations in ice when it was frozen. 

Crucially, confidence ranges are much narrower now than AR4 and AR5 - the previous iterations of AR6. The impacts of extreme weather are more visible and better understood, to the degree that denying the science of climate change can be likened to believing cigarettes are extremely good for health.  

As always, these regulatory developments are important steps toward giving investors the ESG information they need, but do present both risks and opportunities.  

Energy cannot be created or destroyed, just moved from one place to another 

This rule of energy introduces a real risk to net zero and the green transition and has already been observed this year.  

Consider a global oil company, let’s call them Bones & Plankton plc (or BP for short) - a nod to the ancient life which has been formed over millions of years into hydrogen and carbon, known as fossil fuels. BP wants to impress customers, attract talented staff, avoid fines and alleviate the board and management’s guilt for past high emissions.  

It undertakes a large asset disposal programme: selling shale gas deposits in the south-western US Permian Basin, oil tar fields in Alberta and part of a gas pipeline in Turkey. The buyers are hedge funds, sovereign wealth, private equity and national oil companies. 

Has this benefited the environment? The emissions will continue with the new owners, but now they will not be disclosed. Investors, as providers of equity or debt, usually have the ability to engage or vote to remove these emissions. Now the company has disposed of these fossil fuel-intensive assets, that ability has been eliminated. 

Have you been mis-sold an ESG fund in 2022? 

Another hot regulatory topic is combatting the greenwash and the over-representation that can happen when investors are not required to disclose their impacts or when sustainability data from companies is not available. 

This is met via EU directive 2019/2088 (November 2019) from the European Supervisory Authorities that regulate asset managers, banks, insurers and pensions. Or, as it’s better known, SFDR. 

The benefits are clear: allowing an approved fund that can be sold as ‘green’. Demand for these funds from asset owners– labelled as ‘Article 8 or 9’ – is high. And investments can range from European and emerging market equity to UK infrastructure.  

In addition to many Article 8 and 9 fund launches, progress has been made embedding an understanding of all the articles within the SFDR Regulatory Technical Standards, and internal preparations to meet these obligations across various functions at an asset manager.  

The SFDR pudding will be ready in early 2023. In the meantime, SFDR ensures financial market participants will report on sustainability impacts, evidence taxonomy alignment, do no significant harm and provide further updates on the sustainable objectives that investors have bought into.  

Post-Brexit, investors and a technical group advising the UK government debated the UK’s equivalent to sustainable finance regulation and a green taxonomy. More is expected on this later in the year.  

Nature is an asset… 

…with a value, just like equity, real estate, machinery and so on. In order to mitigate climate change, people are realising they also need to consider waste, land use, water, the carbon capture properties of soil and trees, the blue economy and natural ecosystems. The concept of net environmental gain is becoming better understood and prompting institutional clients to question what investors are doing in this space.  

Next year, new reporting based on the Taskforce for Nature-related Financial Disclosures or TNFD (a close relative of the established Taskforce for Climate-related Financial Disclosures) is scheduled to be released. As companies disclose information, investors can use this in investment and engagement decisions. Some metrics can be universal, like dollars spent on the protection of habitats or the number of a particular species. Others are unique like urbanisation, illegal wildlife trade and habitat destruction.  

So, in all, some progress in the first half of the year. TNFD and the upcoming UN Biodiversity Conference in Montreal in December will be important steps toward nature being treated like any other asset in future.   


We're here to help

If you are a financial adviser, or discretionary fund manager call 020 7630 3319 or email us at

If you are a private investor call  020 7416 7780 or email