A recent article in the Financial Times considers the increasing importance being afforded to ‘responsible investment’, and centrally its impact on the global fund management community. The article cites the recent actions of the ‘UN Principles for Responsible Investment’, – a body that acts to “help investors integrate consideration of environmental, social and governance (ESG) issues into investment decision-making”.
Traditionally, fund managers have been (and, of course, still are) legally tasked with an overriding ‘fiduciary responsibility’: to maximise financial return for their clients. Increasingly, fund managers and the wider investor universe are acknowledging that, embedded within the notion of sound returns, lies the idea that responsible investment and profitable investment do mix.
Whatever the future, it is clear that a key consideration of successful investing will focus on the subject of company ‘responsibility’. Thus, those organisations choosing to openly embrace this, via transparent/factual periodic reporting, and a genuine desire to evolve for the better, will be the big winners. Those companies either not ready or not willing to embrace this future may find themselves economically disadvantaged, if not immediately, then in the medium to long term.
