Roundtable

Responsible investment

Responsible Investment The revolution in how investors are assessing companies is gaining momentum. No longer considered niche, responsible investing is rising in prominence among institutions when making investment judgements. Indeed, a study carried out by professional services specialist Aon found that 40% of institutions have a responsible investment policy for making buy or sell decisions. […]

August 2018

Responsible Investment

The revolution in how investors are assessing companies is gaining momentum. No longer considered niche, responsible investing is rising in prominence among institutions when making investment judgements. Indeed, a study carried out by professional services specialist Aon found that 40% of institutions have a responsible investment policy for making buy or sell decisions. A further 14% of the 223 institutional investors Aon spoke to in June are working on implementing such a policy. More and more institutions are expected to adopt a responsible investment policy with research from State Street, also published in June, showing that 83% of institutional investors and wealth managers expect more money to flow into environmental, social and governance (ESG) ETFs by 2023. Behind this shift in mindset is growing demand by clients for institutional investors to assess the non-financial aspects of a company and its impact on the environment and society. This is partly due to younger people entering the workforce and starting to hand their cash to asset managers to fund their retirement. Many of them wish to make an impact rather than just generate a return. Regulation has been another driver as research points to the benefits of backing companies that are better governed and work to ensure good practices in their operations could stretch beyond simply lowering risk. Longer-term gains could be the reward for backing better behaved companies. This is a theory that was backed-up by a notable report by MSCI (Foundations of ESG Investing). However, some rightly point out that the findings of one report alone are not enough to change attitudes across the investment industry. To get to the heart of some of the issues surrounding responsible investment we brought trustees, fund managers and consultants together for a debate on the subject. You can read the conclusions of our discussion from page four.

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