From asset managers to law firms, numerous ESG glossaries have been developed in an attempt to decode sustainable investing.
Among them is Tribe Impact Capital, a London-based wealth manager whose ‘impact phrasebook’ defines terms such as
“Like in any industry, the language we all use is so important,” said Amy Clarke, co-founder and chief impact officer at Tribe. “We all tend to have our own little language, our acronyms, our buzz phrases. And we assume that everybody else understands what we’re talking about.
“And of course, most people don’t understand what we’re talking about. So it’s actually just making it easy for people to understand.”
If you can’t explain it to somebody in very simple, plain English, then the chances are you don’t understand it yourself.Amy Clarke, Chief Impact Officer, Tribe Impact Capital
But Clarke said the impact phrasebook also acts as a ‘health check’ that Tribe employees understand what they are talking about too.
“I think sometimes, and I’ve seen this quite a lot in broader business and also in finance, people jump onto the semantics of the day and they use them freely, without actually really understanding what it is that they’re talking about.
“So it’s a really good discipline for us to say, ‘what are we talking about, and what do we therefore need to unpack for our clients?’
“Our rule of thumb has always been, with communication at Tribe, that if you can’t explain it to somebody in very simple, plain English, then the chances are you don’t understand it yourself.”
If [a client is] just befuddled, it’s very difficult to create a really sticky relationship.Amy Clarke, Chief Impact Officer, Tribe Impact Capital
With the consumer duty coming into force on July 31, Clarke highlighted how the industry has to be mindful of the language that is being used, to ensure that clients understand it.
“But also recognise that actually the client who is engaged, the client who understands, becomes the client who ultimately really partners with you for the change that you’re both collectively trying to accomplish,” Clarke added.
“If they don’t understand what you’re talking about, and they’re just befuddled, it’s very difficult to create a really sticky relationship with that client. But it’s also then very difficult for that client to feel that they’re really engaged in what it is that their wealth is doing as well.”
Chloe Cheung is a senior features writer at FTAdviser.