Progress and Impediments 13 A Dialogue on <strong>Responsible</strong> <strong>Investment</strong> and the Mainstream <strong>Investment</strong> Community 14 The State of <strong>Responsible</strong> <strong>Investment</strong> 19 Modes of <strong>Responsible</strong> <strong>Investment</strong> 23 Barriers to the Mainstream Practice of <strong>Responsible</strong> <strong>Investment</strong> 12
A Dialogue on <strong>Responsible</strong> <strong>Investment</strong> and the Mainstream <strong>Investment</strong> Community During 2003 – 2004, the Global Corporate Citizenship Initiative of the World Economic Forum, in association with <strong>AccountAbility</strong>, organized a series of discussions with corporate and investment community executives as well as other experts: To improve understanding of concrete impediments to and opportunities for broader integration of social and environmental aspects of corporate performance in mainstream investment policies and practices. The initiative’s core aim has been to identify specific obstacles to wider incorporation of non-financial considerations in the valuation and investment strategies of major institutional investors. These discussions also sought to explore possible changes in policies and practices that could “tip” systemic change in the investment community toward this direction. The learning from the initiative has come from a dialogue grounded in three roundtables, convening senior representatives from a cross-section of the investment community 6 together with members of the Global Corporate Citizenship Initiative and other experts, including key governmental, labour and academic leaders. This dialogue was supported by other key initiatives in this field as well as a range of available research documented in endnotes to this report. “<strong>Mainstreaming</strong> <strong>Responsible</strong> <strong>Investment</strong>” summarizes perspectives and issues raised throughout the dialogue, including specific chapters authored by participants reflecting perspectives from key elements of the mainstream investment community: pension funds, fund managers and investment analysts. The views expressed in this report do not necessarily reflect the views of individual members of the World Economic Forum’s Global Corporate Citizenship Initiative or <strong>AccountAbility</strong>. The Roundtables <strong>Mainstreaming</strong> <strong>Responsible</strong> <strong>Investment</strong>, London, July 2003 The first roundtable, hosted by Deutsche Bank, broadly explored investment community perceptions of the relevance and treatment of social and environmental aspects of corporate performance. The discussion focused upon three key factors that could either inhibit or drive effective change: (a) information; (b) knowledge and competencies; and (c) incentives. In attendance were 40 senior representatives from the international investment community and related institutions, including representatives from major pension funds (e.g., CalPERS, USS), asset management companies (e.g., Goldman Sachs, HBOS), representative and regulatory institutions (e.g., US Public Accounting Committee Oversight Board, Association of British Insurers), and business networks (e.g., International Business Leaders Forum, World Business Council for Sustainable Development). Trustees and Fund Managers, New York, October 2003 The second roundtable, hosted by Swiss Re, explored key relationships in the “investment value-chain”, notably between institutions representing the intended beneficiaries and ultimate owners of capital, and those mandated to invest funds on their behalf. A particular focus was on embedded incentives that determine to a great degree the outcome of these relationships. It was attended by sector representatives of fund management (e.g., Citibank, Jennison Associates, Strategic <strong>Investment</strong> Group, Zurich Financial Services, Barclay Global Investors) and pension fund trustees and managers (e.g., New York City Employees Retirement System, New Zealand Superannuations Scheme, NYC Comptrollers Office, BT Pension Fund), and labour representatives. Financial Analysts, London, June 2004 The third roundtable, hosted by the Department of Trade and Industry of the UK government, brought together analysts, fund managers and corporate investor relations officers to explore how analysts’ information, competencies, and incentives impact on valuations and decision-making. The focus was on how analysts, ratings organisations and investor relations made decisions as to whether to factor in specific non-financial aspects of performance. It was attended by executives of fund management/buy-side (e.g., Merrill Lynch Asset Management, ISIS, Hermes Focus Asset, Morgan Stanley and Co, Nomura Asset Management), corporate investor relations officers (e.g., Novo Nordisk), insurance companies (e.g., SwissRe, Standard Life) and investment bank/sell-side analysts (e.g., Merrill Lynch Asset Management, ABN AMRO, Goldman Sachs). Note: A full list of participants is included in the annex to this report. 13
Change language