The tests can be used to calculate ratings for investment portfolios and pension funds. They can be used by financial advisers, financial institutions, pension trustees, managers of charitable funds, NGOs, and ratings agencies.
The tests can also be used to challenge claims about social impact and sustainability especially when investment funds start to use the FCA’s new sustainability label.
These tests would set a new, but not unreasonably high, bar.
To be clear, we are not saying that private finance that does not meet all the relevant tests is ‘bad’ finance. However, we hope that these tests will provide a much more challenging process for screening financial activities that claim to be social impact or sustainable.
Mick McAteer is founder and co-director at the Financial Inclusion Centre
