To help investors integrate social issues into their investment decisions, the PRI has released a new practical guide, ESG integration: how are social issues influencing investment decisions?
It contains case studies from a wide range of sectors, from retail to mining, highlighting methods investors can use to integrate social issues into listed equity investments. It demonstrates how a range of factors, from gender equality to workforce culture, can be applied to different integration techniques.
The social element in ESG issues has traditionally been the most difficult for investors to assess partly because of the lack of mature data showing how they impact a company’s performance. Other hurdles include the fact that there is not an established track record of data or robust regulation to accompany such issues.
Despite the challenges, the PRI report shows that the business case for incorporating social factors is clear. Companies that consider social issues are more likely to yield reliable returns. Their supply chains are often more stable and workers more motivated and productive, giving businesses a competitive advantage.
The report and case studies show that while integrating social issues into investment is in its early stages, the movement is gaining momentum.
Bettina Reinboth, Manager, Social Issues, at the PRI said: “This guide is an invaluable tool to help investors consider social issues in their decision-making processes.
“The case studies challenge the idea that it can’t be done, giving investors concrete examples that show the positive outcomes of doing so.”
