Socially Responsible Investment and Investor Relations

In the late 90s, the integration of environmental, social and governance (ESG) criteria into asset management were largely seen as an issue of values rather than long-term performance.  Since then, however, the debate has advanced significantly and a growing number of investors have started identifying sustainability issues as key factors for financial success. 

Various initiatives have supported this developmen; the growing prominence of Socially Responsible Investment (SRI) Indexes such as FTSE4Good and DJ Sustainability, an increasing body of academic research pointing to a positive relation between sustainability and reduced investment risk, as well as the activities of the UNEP Finance Initiative and, more recently, the UN Principles for Responsible Investment (UNPRI). 

Both private and institutional investors have moved into the field of SRI.  Investment consultants and financial advisors have started developing expertise to support them in doing so.  Sell-side analysts are reflecting the importance of sustainability topics such as climate change, water scarcity and corporate governance within their brokerage reports.

The growth of sustainability investing is widely expected to continue.  According to a recent study by Asset Manager Robeco and consultancy Booz & Company, it is expected to grow to 15-20 percent in the next ten years to around USD 26.5 trillion of total assets under management globally. 

Investor demand for long-term perspectives and for more information on the integration of environmental, social and governance in the running of businesses will increase, and companies will have to be able to deal with these demands.

Acona has extensive experience of working with a wide range of companies in responding to investor demands, either in the form of assisting companies with their submissions to FTSE4Good and DJ Sustainability, formulating responses to request for information from ESG rating agencies or in helping companies to engage directly with investors.