A three-year initiative to increase levels of responsible investment around the world has been kicked off by a group of 11 major institutional investment institutions.
The institutions, under the banner of the Investment Leaders Group (ILG), have published a scoping document that outlines how the project needs to ‘shift the investment chain towards responsible investment’.
The report, which has been produced in conjunction with the University of Cambridge Programme for Sustainability Leadership, concludes that it is ‘absolutely necessary’ to reintroduce long-term considerations into investment decisions around the globe, and that so far efforts to do so ‘have been underwhelming’.
It adds: ‘Despite tremendous exertion and despite the thousands of signatories committed to the PRI, market dynamics remain pre-occupied by the short-term, and investment does little to answer the challenges of our time.’
The 11 institutions, who include Natixis Asset Management, Allianz Global Investors and Zurich Insurance Group, say they have a responsibility ‘to lead by example’ and that ‘a group that is small in number can climb higher and go further’ than larger alliances of investors.
Philippe Zaouati, chair of the ILG, said: ‘In spite of a widespread rhetorical commitment to responsible investment principles, market dynamics remain reoccupied by the short-term, and the majority of investment does little to answer the challenges of our time. The ILG will seek to change this, first of all by defining the value of responsible investment and then working out how to promote it.’ The ILG says publication of the scoping report, titled The Value of Responsible Investment, ‘is a first step towards that aim’.
Among other things, the report says investors should commission targeted research on the degree to which the risks generated by environmental ‘megatrends’ are limiting future returns and should start to ‘scale up’ capital allocation into technology, infrastructure and new businesses in the low carbon field. Click here to download a copy of the report.