Better returns for business.pdf - Oxfam New Zealand

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SIXBox 1: Better Returns in a Better World roundtablesAccess to Medicines, 7 April 2009, London, hosted by SustainAbility.Arms Trade, 2 June 2009, Stockholm, hosted by Ethix SRI Advisors.Decent Work in Global Supply Chains, 17 September 2009, London, hosted by AvivaInvestors.Access To Water, 24 September 2009, Paris, hosted by Crédit Agricole Cheuvreux.Food Security: Investing in Farmland, 12 January 2010, London, hosted by HendersonGlobal Investors, with the International Institute for Environment and Development.Private Equity Investing in Developing Countries, 27 January 2010, London, hostedby the Church of England Ethical Investment Advisory Group and the CommonwealthDevelopment Corporation.Transparency, Bribery and Corruption, 23 March 2010, New York, hosted by CalvertInvestments, with Transparency International and the US Social Investment Forum.This report summarizes the lessons learnedduring the course of the BRBW project, andmakes a series of recommendations to theinvestment community, policy makers andmore broadly to civil society. It is divided intofour chapters. Chapter 2 sets out the broadinvestment arguments around why investorsshould be concerned about poverty alleviationand development issues. This is important asit helps understand the limits to the ‘businesscase’ for action. Chapter 3 explains thespecific actions that investors can reasonablybe expected to take to contribute to povertyreduction. Chapter 4 discusses the majorstructural and technical barriers to investoraction identified in the course of the project.Finally, Chapter 5 sets out our proposals on howthese structural and technical barriers may beaddressed.1.2. Project scope and limitationsThe project focused on a specific part of thefinance sector, namely European and NorthAmerican institutional investors (in particular,pension funds, insurance companies andinvestment managers). It concentrated primarilyon investments in the shares of publicly listedcompanies (equity investment) and, to a limitedextent, on alternative investments, namelyprivate equity. 4OUR AIM WAS TO DISCOVER WHAT COULDBE DONE TO MAXIMISE THE POSITIVECONTRIBUTION INSTITUTIONAL INVESTORSCAN MAKE TOWARDS POVERTY REDUCTION.We chose this focus because it is in thesegeographic areas and in this asset class(i.e. listed equities) that the debate aroundresponsible investment is at its most advanced.Our aim was to identify and understand goodand best practices with the aim of discoveringwhat more can be done to maximize the positivecontribution that institutional investors can maketowards poverty reduction.
SEVENThe fact that the project was carried out againsta backdrop of unprecedented turmoil in theworld’s financial markets lent a particular urgencyand focus to our work. The World Bankestimates that 64 million more people will fallinto extreme poverty in 2010 due to theeconomic crisis. 5QUESTIONS HAVE BEEN RAISED ABOUTTHE PROPER ROLE OF INVESTORSIN SOCIETY, BOTH IN TERMS OF THESPECIFIC INVESTMENTS THEY MAKEAND THE EXTENT TO WHICH THEYTAKE INTO ACCOUNT WIDER SOCIETALCONSIDERATIONS.The financial crisis has undermined trust in theglobal financial system; financial institutions,and the market as a whole, have been criticizedfor short-termism, excessive speculation, poortransparency, and a lack of accountability toregulators or to wider society. Questions havealso been raised about the proper role ofinvestors in society, both in terms of the specificinvestments they make and the extent to whichthey take into account wider societalconsiderations when making those investmentdecisions. While our discussions with investorswere inevitably informed by the more generaldebates around the causes of the financial crisisand the way in which trade and investmentpolicies affect progress on poverty reduction,this report is not intended to provide asystematic analysis of the global financial system. 6Finally, we recognize that some of therecommendations made in this report abouthow to overcome the structural and technicalobstacles faced by investors (when tryingto build poverty reduction and developmentissues into their investment processes) will befamiliar to investors involved in responsibleinvestment debates. We also recognize thata number of our recommendations reflectproposals that have been made for improvingthe financial system more generally in the wakeof the financial crisis, which, if agreed, couldproduce broader development benefits acrossthe finance sector. The important point is thatthe proposals must emerge as priorities if weare to make real progress towards buildingpoverty alleviation and development into themainstream of investment practice.
Page 4: 1. Introduction“We can’t afford
Page 9 and 10: NINEOxfam is a rights-based organiz
Page 11: ELEVENWhile the debates around acce
Page 15 and 16: FIFTEENRole 2: Stock selectionInves
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Page 21 and 22: TWENTY ONE4.1 Introduction4.2 Struc
Page 24 and 25: TWENTY FOURThe lack of transparency
Page 26 and 27: TWENTY SIXBox 5. Integrating living
Page 28 and 29: TWENTY EIGHTConsensus around perfor
Page 30 and 31: 5. Conclusions and recommendations
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Page 34 and 35: THIRTY FOURInstituting proper incen
Page 36 and 37: THIRTY SIXGovernment leadership of
Page 38 and 39: THIRTY EIGHTThe other issue that wa
Page 40 and 41: FORTYAs a final reflection on the q
Page 42 and 43: FORTY TWOCivil society organisation
Page 44 and 45: FORTY FOUREndnotes1 See www.busines
Page 46: FORTY SIXOxfam acknowledges the con

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