Failing to consider long-term investment value drivers – which include environmental, social and governance issues – in investment practice is a failure of fiduciary duty.
In China, Hong Kong, India, Malaysia, Singapore and South Korea there are compelling national interest reasons for policy makers to promote the incorporation of environmental, social and governance factors into investment practice.
Following the launch of Fiduciary duty in the 21st century in 2015, the PRI, UNEP FI and The Generation Foundation launched a three-year project to clarify investors’ obligations and duties around incorporating ESG issues into investment practice.
The project has worked with investors and governments to publish a Global statement on investors’ obligations and duties, roadmaps in more than ten countries on the policy changes required and research into Investor obligations and duties in six Asian markets.
Former Vice President and Chairman of Generation Investment Management, Al Gore, introduces the PRI, UNEP FI and The Generation Foundation’s Fiduciary duty in the 21st century programme.
The Global statement on investor obligations and duties calls on international policymakers and national governments to clarify the obligations and duties of investors and other organisations in the investment system.
Fiduciary duties are imposed upon a person or an organisation who exercises some discretionary power in the interests of another person in circumstances that give rise to a relationship of trust and confidence.
Fiduciary duty is not the obstacle to incorporating ESG issues into investment processes that it is commonly assumed to be, although fiduciary duty is often presented as an excuse for not taking action.
Though there are variations between countries – reflecting national priorities, the current development of responsible investment in the country in question and prevailing legal requirements – our research suggests areas in which progress is needed globally.