Welcome to the EIRIS responsible investment blog. Get our perspectives on the latest trends and developments in responsible investment and corporate social responsibility.
Voting for the election of a service provider representative to the Board of the UN supported Principles for Responsible Investment (PRI) is now open, and (as a current Board member) I’m standing for re-election.
Click the icon for my PRI in Person husting speech in Singapore or click the flags to read it
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From bigger to better
Service providers have made responsible investment possible and been instrumental in helping the PRI grow to encompass more than half of all institutional assets. The challenge now is to make PRI and responsible investment not just bigger but better – and tapping into the expertise, insights and talent of the service provider base will be vital if that is to happen. That’s why ensuring clear communication between investors and service providers is at the heart of why I’m standing for the Board.
Bringing experience to the Board
I have 33 years’ experience of running an organisation that operates globally and is of similar size to PRI, and also 20 years as Treasurer of the UK Sustainable Finance Association (UKSIF) promoting the case for responsible investment and facing the challenges of a diverse membership base.
What I hope to achieve
My core ambitions for service providers over the next three year are to:
Make reporting an opportunity – From next year, service providers will have to complete the annual PRI assessment. I want to ensure this is as straightforward and useful a process as possible. It should become a tool for investor signatories to make sure they can identify service providers who can help to meet their needs.
Harness global diversity – From index providers to industry associations, Australian to Arabic, the PRI Board must cater for the enormous range of service providers and signatories more generally. This includes creating opportunities for us to work together, using multiple languages in documentation and remaining open to developments from all around the world.
Make real responsible investment happen – As the PRI moves to deeper adoption of new practices and working with regulators to create the conditions for long term sustainable wealth creation it should tap into the expertise and best practice that service providers can bring. Similarly, the Board’s focus should be on the job of achieving our strategy alongside others who share our goals. At PRI we should focus on getting the job done, rather than necessarily doing it all ourselves.
Expand in Asia and beyond – I’ve worked on projects in Korea and Japan for many years and seen PRI becoming a force for change in Asia. I want to help push that forward as well as helping PRI develop responsible investment in other parts of the world. I’m delighted to have the support of Quick and Ark Totan Alternative from Japan as well as CAER in Australia and Hermes EOS to support my candidacy.
Perhaps most importantly, I am also keen to hear PRI Signatories views on what the board should be concentrating on going forward.
You can see the details of my candidate statement here and if you are a service provider signatory I would be delighted if you would vote for me as well. Together we have a unique opportunity to change the culture, mindset and impact of the investment industry.
I also want to take the opportunity of this campaign to thank all those PRI signatories who have done so much to promote and develop responsible investment strategies and opportunities, and to wish everyone every success with their own responsible investment journey.
SOCO International, the UK-based international oil and gas exploration and production company, hit the headlines two years ago due to its operations in Block V in Virunga National Park. This World Heritage Site, located in the Democratic Republic of Congo (DRC), is one of the most biologically-diverse areas on the planet.
Following intensive engagement by Aviva Investors, other investors, non government organisations and official mediation undertaken with the UK National Contact Point for breaches of the OECD Guidelines for Multinational Enterprises, the company made a commitment that it would not “undertake or commission any exploratory or other drilling within the Virunga National Park” and that it would not “conduct any operations in any other World Heritage site”. In 2015, SOCO declared that it had relinquished its licence for Block V and, following the end of its contractual obligations to the Government of the DRC, has not sought to renew its licence. Read more >
Obesity is a widely noted social risk and over the years the issue has been receiving increasing attention from investors. Companies have the power to respond to obesity risks and minimise the negative social influence of products through a range of different methods. Investors considering investing in companies with a high obesity risk should consider whether the company is appropriately responding and managing these risks. According to our research, Australian companies have been lagging behind global peers in their responses to the increasing risks associated with obesity.
Australia is a world leader when it comes to obesity levels – Australian Government statistics note that 63% of Australian adults are overweight or obese. Furthermore, one in four Australian children is overweight or obese. It is therefore critical that Australian companies do not drag their feet with regards to their response to obesity risks. Read more >
On April 7th 2016, Vigeo Eiris Rating sent a series of alerts to its clients – investors and asset managers – on 24 companies linked to the ‘Panama Papers’ affair.
These banks are listed as having created offshore companies in Panama for their clients through the law firm Mossack Fonseca.
Read more >
The recent case of Samarco’s dam that collapsed in Brazil shows that waste management is key to the mining sector in addressing significant risks. The collapse resulted in the joint owners, Vale and BHP Billiton, dealing in the aftermath with fatalities and serious injury, health risks due to water contamination, community displacement and environmental pollution, as well as serious impacts on local biodiversity. Read more >
Since the 2008 global financial crisis banks have been the subject of intense critical scrutiny, and 2015 has thus far been no different.
During the year regulators across the global financial jurisdictions have continued to hit banks with a series of eye-watering fines and financial penalties that have consistently reached beyond the billion dollar mark, covering issues including the misselling of payment protection products, trader manipulation of global currency and interest rate markets, and the breaching of anti-money laundering regulations. The likelihood is that this critical scrutiny will continue into 2016 and beyond.
It is the view of EIRIS that alongside this regulatory activity, investors will increasingly be looking to assess how effectively financing institutions are managing their environmental, social, and governance (ESG) risks, due to the potential impact this could have on their credit-worthiness. Consequently, EIRIS has developed a suite of criteria to enable investors to compare financial institutions on sector-specific ESG performance. Read more >
Compulsory superannuation in Australia means every working Australian is an investor. Australia was reported to be the fourth largest pension market in the world in 2014 with assets growing to 113% of our GDP during the year, as per the Towers Watson Global Pension Assets study. The sheer size of these investments makes us, investors, incredibly powerful. And more than ever it matters that we think about risk in a holistic way, involving both our heart and mind and making informed decisions about our investments. Read more >
The Volkswagen (VW) emissions scandal has generated an enormous amount of coverage in both the regular and financial press. This is unsurprising given the sheer magnitude of the issue with up to 11 million vehicles affected, recall costs estimated anywhere between USD 6.5bn and USD 10bn, potential regulatory fines of USD 18bn, and both the taking of class actions and the possibility of criminal proceedings against the company in the United States. The news that the company’s CEO, Martin Winterkorn, has stepped down in the last few days confirms the scale of the issue for VW and one senses there is likely to be much more fallout to come. Read more >
Latest data on SRI market developments in the German-speaking countries of Switzerland, Austria and Germany provided by the German sustainable investment forum (Forum Nachhaltige Geldanlagen – FNG) shows evidence of continuous increases in SRI volumes for the sixth year in a row. With a total market volume of EUR 197.5 bln and asset overlays for simple exclusions of cluster munitions and anti-personnel-mines affecting approximately EUR 2.5 trillion, the integration of sustainability imperatives into investment decisions stands on fertile ground for future growth.
Read more >
Social risks in consumer finance and the challenges posed by cash-lending companies were the issues in focus at the United Nations-supported Principles for Responsible Investment (PRI) panel in Melbourne, Australia on the 9th of July. The panel was attended by three analysts from CAER, an EIRIS global partner.
Read more >