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.<\/p>\n
The 32 funds from six continents include some of the world\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s largest long-term investors and represent more money than all hedge funds and private equity groups combined. They will sign six \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cPrinciples for Responsible Investment\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d, founded on the belief that such standards are material to assets\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2 long-term value.<\/p>\n
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.<\/p>\n
The principles include vows to incorporate such standards into investment analysis, active engagement with companies, demands for ESG disclosure and co-operative action.<\/p>\n
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\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s largest, said there had been similar initiatives in the past, but \u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cnothing to this extent\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d.<\/p>\n
\u00c3\u00a2\u00e2\u201a\u00ac\u00c5\u201cThis represents a shift in the mainstream of investment\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u20ac\u00b0.\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u20ac\u00b0.\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u20ac\u00b0.\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u20ac\u00b0supported by the world\u00c3\u00a2\u00e2\u201a\u00ac\u00e2\u201e\u00a2s largest corporate owners,\u00c3\u00a2\u00e2\u201a\u00ac\u00c2\u009d he said.<\/p>\n