Financial services workers in the UK are increasingly anticipating that business leaders will prioritize the scaling back of ESG (Environmental, Social, and Governance) and DEI (Diversity, Equity, and Inclusion) commitments.

Financial services workers in the UK are increasingly anticipating that business leaders will prioritize the scaling back of ESG (Environmental, Social, and Governance) and DEI (Diversity, Equity, and Inclusion) commitments.

The financial landscape in Europe, particularly the UK, is experiencing a significant shift in focus as senior financial professionals express concerns about a potential reduction in commitments to Environmental, Social, and Governance (ESG) and Diversity, Equality, and Inclusion (DEI) principles over the next five years.

According to a recent report by CRIF, more than half (56%) of senior financial professionals in the UK anticipate their leadership will place less emphasis on ESG in the near future. This expectation stems from a combination of global and US political influence, UK financial sector rollbacks, regulatory changes, and industry sentiment.

The recent rollback of ESG and DEI policies in the United States, notably under President Donald Trump's administration, has had a ripple effect internationally. The US exit from the Paris climate agreement and cuts to DEI roles in federal departments signal a retreat from these commitments, influencing attitudes in the UK financial sector.

Leading UK banks such as Barclays, NatWest, and HSBC have scaled back their green finance ambitions. Some have removed climate targets from senior executives’ bonus schemes or delayed net zero targets by decades, demonstrating a strategic deprioritization of ESG initiatives within key financial institutions.

UK regulators, including the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), have also stepped back from enforcing DEI regulations. Notably, the FCA shelved plans to "name and shame" companies under investigation for DEI issues after criticism from the financial sector and politicians.

Despite these developments, consumer demand for firms to demonstrate social responsibility through ESG and DEI remains strong, especially among younger demographics. Around 47% of Europeans say they prefer financial providers promoting DEI, rising to 59% among 18-34-year-olds. This gap between consumer values and anticipated corporate priorities creates tension in the sector.

Sara Costantini, Regional Director for the UK & Ireland at CRIF, stated that ESG has become a core component of business practices in the UK and EU, bolstered by a strong regulatory framework. However, the findings suggest that this commitment may be waning, raising concerns about the future of sustainable and inclusive practices in the financial services industry.

The Women in Finance Charter, created in 2016 to address the underrepresentation of women in senior managerial roles within the UK's financial services sector, continues to be a relevant issue. The ongoing focus on DEI is crucial for promoting a more diverse and inclusive industry.

CRIF's second Banking on Banks report, due to be published later in the year, will delve deeper into the trends and issues that are expected to shape European financial services in the decade ahead. The report series for 2025 explores changes in the financial services sector over the last decade, providing valuable insights into the evolving landscape.

In conclusion, while the UK financial sector appears to be shifting its focus away from ESG and DEI, consumer demand and the recognized importance of these principles for brand loyalty and market differentiation suggest a need for continued commitment. The coming years will be critical in determining the balance between economic growth and social responsibility in the financial services industry.

[1] Source: CRIF's Banking on Banks report series for 2025 [2] Source: Various industry reports and news articles

1. In light of the potential decrease in emphasis on ESG and DEI principles, it might be wise for individuals to seek alternatives for wealth management, considering personal-finance options that align with their social values.
2. As businesses in the UK financial sector reconsider their ESG and DEI commitments, those interested in environmentally and socially responsible investing could explore opportunities in different European countries, where such principles continue to be prioritized.

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