Financial Times – Pension funds worth more than $2,000bn will commit themselves on Thursday to the first global charter placing environmental, social and governance (ESG) standards at the core oftheir investment strategies.
The 32 funds from six continents include some of the world’s largest long-term investors and represent more money than all hedge funds and private equity groups combined. They will sign six “Principles for Responsible Investmentâ€Â, founded on the belief that such standards are material to assets’ long-term value.
The funds say it is their fiduciary responsibility to demand these standards of the companies in which they invest through more sophisticated analysis and active ownership policies.
The principles include vows to incorporate such standards into investment analysis, active engagement with companies, demands for ESG disclosure and co-operative action.
They aim to usher in a fundamental shift from short-term to long-term considerations. Colin Melvin, director of corporate governance for Hermes, which manages the BT pension fund, the UK’s largest, said there had been similar initiatives in the past, but “nothing to this extentâ€Â.
“This represents a shift in the mainstream of investment . . . supported by the world’s largest corporate owners,†he said.
