Elephants in the sustainability room
OCTOBER 2017 [Investment & Pensions Europe MAGAZINE]
Decent folk in the investment world are beginning to ask why our sector is so slow to change. Why can’t it function as a fit for purpose enabler of human prosperity? Three events in last few weeks illustrate real change may be in the air.
The CIO of Japan’s Government Pension Investment Fund (GPIF), the world’s largest pension fund, acknowledged at the PRI 2017 conference that institutional investors continue to focus on the short-term despite demanding a long-term focus from their managers and companies in which they invest.
Fidelity now speaks about “helping companies become better companies” and frames its commitment to ESG as part of being a “responsible allocator of capital” to foster “economic growth and job creation”.
The CFA Institute is now talking about the need for “purposeful capitalism” in its Future State of the Investment Profession manifesto, specifically mentioning “preventable surprises” in its analysis of a Purposeful Capitalism Scenario. So can change agents retire now, secure in the belief that finally we’ve won? Sadly not. This is only the end of the beginning. All that’s needed is to develop the capacity and will for this thinking to become integrated into the cultures and decision frameworks of a critical mass of the investment industry.