Stakeholders claim further government ESG intervention is not required

The market is doing a good job of implementing ethical investing standards, including peer-to-peer lending, and further government intervention is not required, industry stakeholders have claimed.

Speaking at the P2P Investing Summit, a virtual event hosted by Peer2Peer Finance News and AngelNews, Roy Warren (pictured), managing director of Folk2Folk, said that his P2P lending platform gives local lenders returns for supporting local businesses in regions that lack attention.

He said it is disappointing an environmental, social and governance (ESG) framework is needed for the market as it should go down to peoples’ moral compasses and implementing that culture at companies.

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“We hear the word government too much,” Warren said.

“This country has in my view a great future, but we need a lot of private enterprises to pick it up and run with it to make things happen.

“It’s probably disappointing we need a formwork at all, ultimately it’s about folk doing good things and having a moral compass. You need to have heart and passion in it and have it in the forefront of your mind, working for the benefit of the economy.

“I’ve seen so many companies that try to enforce their beliefs on employees, it’s all about a culture developing over time and recruiting people with the same beliefs and feeling and it’s a challenge, you can’t enforce people.

“Folk2Folk started as good folk lending to good folk. We’re clear and transparent. None of us are perfect, as long as you have the intent to become perfect, that’s the important thing, you have to have a belief.

“We have always been a strong supporter of levelling up agenda, social aspects and have always been a regional lender and a lot of what we’ve done is about community and keeping economies local.”

Simon French, managing director of Panmure Gordon, which provides advice and research to UK small and mid-cap corporates and investment companies, said that P2P lending is inherently ethical by connecting people and borrowers, and closing the funding gap for businesses.

He said the government does not need to do more and the market is already doing a good job.

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“I’m not entirely convinced this is something the government needs to prescriptively do more on,” French said.

“I think there are areas to work on corporate governance from its pushing up agenda and net zero and levelling up agenda.

“It’s doing policy in areas that investors are looking at and taking signals on reflecting on their behaviour. Do they need to go further and start subscribing standards and directing capital?

“I’m quite uncomfortable as an economist trying to see governments direct capital from a centralised point because one of the ideological underpinnings to levelling up is a more localised level of control of allocation of capital.

“I’m not shouting on rooftops the government needs to do more in this agenda, the market is doing a pretty good job.”