Sustainable and responsible investment' can play a major role in achieving sustainable development, if it puts, at its heart, intelligent and constructive dialogue between companies and investors.
Society must emerge from the current economic situation with an advanced strategy for tackling climate change and other sustainable development challenges. Companies and capital markets, in spite of their recent failings, will play a critical part in this process.
Indeed, the interface between progressive investors and businesses has already demonstrated that it is a powerful force for the development of sustainable practices within companies – and has been strongly influential in the emergence of published sustainability strategies and of sustainability reporting processes that have driven underlying performance.
Looking forward, for companies to pursue a progressive course of action, they will need investor support. Equally, for asset owners and managers to give such support they will need sustained assurance that progressive action by companies will enhance investment returns.
All of this depends on the existence of efficient and meaningful communication between companies and investors on how sustainability is to be achieved and on the impact that this will have on corporate strategy and performance. Sustainability needs to be put at the heart of the investor communications process; equally financial considerations need to be at the heart of the sustainability agenda.
In short, we need more ‘sustainable and responsible’ investment – and it needs to be bigger, bolder and better.
