Investment analyses that include CSR related metrics (previously mentioned in “Do the Math on CSR“) are increasingly being seen as the way of the (very near) future.
Robeco, a dutch financial services provider, predicts the market for investment products that take into account these CSR metrics will be brought into the mainstream by 2015, constituting 15 – 20% of global assets under management (AUM).
“It’s a tool for better assessing risk” Head of the CFA Institute’s Centre for Financial Market Integrity, Charles Cronin, says of ESG, “People don’t want any surprises these days (…) An ESG framework helps you manage an aspect of risk”
“Responsible investors benefit from better risk management, greater transparency, and an active engagement with companies to promote better management” Oxfam Policy Analyst, Helena Vines Fiestas
Demand for these investments also comes from the ‘the global consciousness’ being rapidly more concerned about climate change and the environment. Christian Werner, Sustainable Asset Management’s (which Robeco owns a 85% stake in) Chief Investment Officer, explains, “If we don’t investment in these companies fast, we won’t get anywhere near the solution” referring to the argument that growth will have to come from these sectors if the future of humanity is to be secure, and therefore they provide an excellent investment opportunity.
Major players have also been getting in on the action:
– HSBC has instituted a Climate Change Centre of Excellence headed by co-author of “Sustainable Investing: The Art of Long Term Performance”, Nick Robins
– Goldman Sachs is about to launch Sustain, a concept which will form the basis of a fund that draws on environmental, social and demographic developments to predict investment success