Responsible Investment : what it is, what it’s not, and why it matters Emily Kenway Head of...
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Transcript of Responsible Investment : what it is, what it’s not, and why it matters Emily Kenway Head of...
![Page 1: Responsible Investment : what it is, what it’s not, and why it matters Emily Kenway Head of Projects, ShareAction.](https://reader030.fdocuments.net/reader030/viewer/2022032517/56649cbf5503460f94985094/html5/thumbnails/1.jpg)
Responsible Investment: what it is, what it’s not, and why it matters
Emily KenwayHead of Projects, ShareAction
![Page 2: Responsible Investment : what it is, what it’s not, and why it matters Emily Kenway Head of Projects, ShareAction.](https://reader030.fdocuments.net/reader030/viewer/2022032517/56649cbf5503460f94985094/html5/thumbnails/2.jpg)
Increasing interest in responsible investment
• Media interest – Comic Relief, Church of England
• Fossil fuel concern – divestinvest.org • Post-2008: oversight and protect returns• Understanding of mission potential
![Page 3: Responsible Investment : what it is, what it’s not, and why it matters Emily Kenway Head of Projects, ShareAction.](https://reader030.fdocuments.net/reader030/viewer/2022032517/56649cbf5503460f94985094/html5/thumbnails/3.jpg)
What responsible investment isn’t
Definitions:
• Ethical investment – positive/negative screening of companies e.g. ‘sin stocks’
• Impact investing - investments made into companies, organisations, and funds to generate social and environmental impact alongside a financial return.
Both have a role to play, but RI provides a broader toolbox & addresses other issues.
![Page 4: Responsible Investment : what it is, what it’s not, and why it matters Emily Kenway Head of Projects, ShareAction.](https://reader030.fdocuments.net/reader030/viewer/2022032517/56649cbf5503460f94985094/html5/thumbnails/4.jpg)
What responsible investment is
Responsible investment is not about changing what you invest in; it is about using your voice as investors.
Can include screening and impact investing, but it also emphasises engagement.
Engaging with investments managers and assets to ensure:• Value is created sustainably• Social impacts are positive• Environmental impacts are not detrimental
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Why do it?
Aims: 1. Protect your reputation2. Protect your assets3. Further your mission
“giving away money is not the only means of supporting our beneficiaries … [we aim to] ensure that, as far as reasonably possible, our endowment is managed in a way which is consistent with what our beneficiaries are trying to achieve, in terms of creating a just and fair society”- Head of Finance, JRCT, Civil Society June 2012
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Demystifying engagementEngagement = pursuing constructive dialogue
Investment managers:• Oversight• Clarity about your charity’s aims
Investee companies:• Attending AGMs• Letter-writing• Direct meetings with companies
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Does it work?
Yes!
Benefiting financial value: • Environment Agency research investigated link between
corporate environmental governance and financial performance > 85% of cases demonstrated +ve correlation
• 2012 study by London Business School, Boston College and Temple University > institutional investors who engaged with companies on sustainability issues experienced a higher level of return, particularly in the year after engagement.
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Does it work?Impacting companies and their practices:
Living Wages
Calculated annually as the minimum wage needed to cover the bare essentials of life.
Multiple engagement methods used.
Thousands more now take home enough pay to support themselves.
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Corporate lobbying
• Ensuring companies pursue political lobbying programmes which do not contradict public statements on issues such as emissions reduction
• Calling to companies’ attention potential conflicts AstraZeneca no longer funds controversial legislation group ALEC.
Modern Day Slavery
• Child labour, sex trafficking, and forced labour (UN definition)• Government commitment: Modern Slavery BillJoint committee recommends company reporting on mitigation efforts.
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How do you do it?Consider:1. Governance / investment constraints2. Staffing3. Internal education & inclusion4. Communicating with investment managers5. Themes of relevance to mission
New report in October 2014 taking you through the steps to a tailored and thought-through RI policy.
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Prioritisation is key
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Obstacles…1. Internal capacity Engagement can be lighter or heavier; select key themes of manageable number; joining networks and outsource; have confidence in your managers and direct them clearly
2. Concerns about financial valueResponsible investment does not need to narrow your universe of holdings.
3. Concerns about cloutNovelty counts; social capital; collaborate
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Obstacles…
4. Unresponsive managersThey shouldn’t be…; you’re not the only client asking; Managing for Good survey at www.shareaction.org/charityinvestment.
5. Lack of expertiseManagers should speak on your terms; you already know it; use available resources e.g. www.shareaction.org/charityinvestment and PRI