This blog was launched nine months ago to track progress in building more sustainable capital markets. Now seems a good time to reflect on this year’s developments. From a UK perspective, which are the most significant signals of future change?
Here is my list of the key trends from 2009:
• Civil society starts to demand a more accountable finance sector
Eg. Anger at remuneration levels, Deepening of NGO research and campaigns
• Politicians, regulators and industry leaders increase support for good governance of asset owners and more responsible ownership of assets
Eg. Lord Myners’ emphasis on “ownerless corporations”, The Pensions Regulator’s governance campaign, the Walker Report’s Stewardship Code recommendations, Personal Accounts Delivery Authority Investment Consultation responses
• Modern green and ethical retail investors and their advisers seek positive ways to make money and make a difference with some of their investments
Eg. YouGov research for National Ethical Investment Week 2009, Conservatives commit to “Green ISAs”
• Stock exchanges deepen their focus on support for sustainability
Eg. World Federation of Stock Exchanges publishes interactive “Exchanges and Sustainable Investment” report, UN hosts sustainable stock exchanges event
• Bonds and other financial instruments for sustainable infrastructure move up the agenda
Eg. HSBC’s Vaccine Bond, second and third issues of World Bank green bonds, the Climate Bonds Initiative
In twelve months time, will these still seem like the key developments in 2009?
Showing posts with label Institutional investors. Show all posts
Showing posts with label Institutional investors. Show all posts
Sunday, December 20, 2009
Monday, October 26, 2009
Capital and Control
The flow of reports and comments in the run-up to both Copenhagen and the final recommendations of the Walker Review continues this week.
“Catalysing low-carbon growth in developing economies: Public Finance Mechanisms to scale up private sector investments in climate solutions” is the latest on “capital” for the low carbon economy. It was launched today by UNEP in partnership with an impressive range of pension, investment and insurance organisations.
Meanwhile, on effective shareholder ownership and “control”, I was struck by this piece “not more regulation, more Responsibility” from Colin Melvin of Hermes in Sunday’s Independent.
“Catalysing low-carbon growth in developing economies: Public Finance Mechanisms to scale up private sector investments in climate solutions” is the latest on “capital” for the low carbon economy. It was launched today by UNEP in partnership with an impressive range of pension, investment and insurance organisations.
Meanwhile, on effective shareholder ownership and “control”, I was struck by this piece “not more regulation, more Responsibility” from Colin Melvin of Hermes in Sunday’s Independent.
Thursday, July 23, 2009
Where is PADA's "Investment Impact Committee"?
This question is promped by the Annual Report of the Personal Accounts Delivery Authority (PADA).
In Appendix A, you will find details of PADA’s Advisory Committees – the "Consumer Representative Committee" (from Age Concern to Which?), the "Scheme Management and Trustee Advisory Committee" (the pensions professional bodies) and the "Employer Representative Committee" (CBI, etc.).
But where is the "Public Interest Committee" or the "Other Stakeholders Committee"? Or even just the "Investment Impact Committee"? For example, although Personal Accounts will become an investor with global impact, there is no representation for the Climate Group, the Ethical Trading Initiative or indeed for the investor relations functions of the businesses whose shares Personal Accounts will hold to pay our future pensions. Some mistake surely?
In Appendix A, you will find details of PADA’s Advisory Committees – the "Consumer Representative Committee" (from Age Concern to Which?), the "Scheme Management and Trustee Advisory Committee" (the pensions professional bodies) and the "Employer Representative Committee" (CBI, etc.).
But where is the "Public Interest Committee" or the "Other Stakeholders Committee"? Or even just the "Investment Impact Committee"? For example, although Personal Accounts will become an investor with global impact, there is no representation for the Climate Group, the Ethical Trading Initiative or indeed for the investor relations functions of the businesses whose shares Personal Accounts will hold to pay our future pensions. Some mistake surely?
Thursday, July 16, 2009
From Crisis to Recovery: Reshaping Capital Markets
I have contributed a chapter on sustainable capital markets to a new Green Alliance pamphlet “From crisis to recovery: New economic policies for a low carbon future".
In it, I describe our policy recommendations to tackle the underlying issues that drive today’s dysfunctional investment approaches. We think this needs not just better regulation but also improvements to leadership, cultural norms and external scrutiny.
Specific proposals include:
In it, I describe our policy recommendations to tackle the underlying issues that drive today’s dysfunctional investment approaches. We think this needs not just better regulation but also improvements to leadership, cultural norms and external scrutiny.
Specific proposals include:
- Pension funds and other major investment owners should be required to report on how they implement their sustainable investment policies
- Publicly owned investment holders should be required to be responsible owners and report annually on their progress
- Greater transparency should be demanded of both companies and institutional investors
- The objectives of financial regulators should enable them to take greater account of the wider public interest, including sustainable development.
It would be great to have your comments on these suggestions and the rest of the chapter.
"Investing in a Sustainable Recovery" Initiative
Details about the “Investing in a Sustainable Recovery” initiative are now available on the UKSIF web site.
There is a short description and notes from its first two roundtables. The third roundtable in May focused on “green bonds” and discussed a paper on “climate bonds” by Sean Kidney and colleagues.
The Initiative is convened by Tomorrow’s Company, UKSIF and the HSBC Climate Change Centre of Excellence, and supported by The London Accord and Network for Sustainable Financial Markets. Participation is by invitation only to institutional investors in fixed income and other asset classes, and relevant policy influencers.
There is a short description and notes from its first two roundtables. The third roundtable in May focused on “green bonds” and discussed a paper on “climate bonds” by Sean Kidney and colleagues.
The Initiative is convened by Tomorrow’s Company, UKSIF and the HSBC Climate Change Centre of Excellence, and supported by The London Accord and Network for Sustainable Financial Markets. Participation is by invitation only to institutional investors in fixed income and other asset classes, and relevant policy influencers.
Wednesday, April 1, 2009
Investors call for 'green' focus in economic recovery measures
A group of major investors, representing over £400bn in funds under management, has today written to Gordon Brown, as Chair of the London Summit, supporting a strong ‘green’ element in programmes of fiscal stimulus undertaken by government.
The initiative was convened by UKSIF and Tomorrow’s Company.
The initiative was convened by UKSIF and Tomorrow’s Company.
Thursday, March 19, 2009
Green Bonds for a Green Stimulus?
Investor interest in green stimulus packages is growing. Earlier this week, a group of investors, supported by UKSIF and Tomorrow’s Company met for the second in a series of roundtables to explore how economic stimulus packages could be encouraged to accelerate the transition to a low carbon, resource efficient economy.
Stimulus packages need to leverage private investment into the new green economy, they said. And there is an emerging consensus that well designed “green bonds” are an important part of this. Because this investment is urgent, these bonds need financial characteristics already well understood by investors. They need to look attractive as conventional fixed income investments not as something new and different that can justify only a cautious toe in the water for the next few years.
Luckily, there is already a good example to follow in the work of the International Finance Facility for Immunisation which works with the GAVI Alliance and the World Bank. The IFFIm has created and placed institutional bonds backed by government commitments to bring forward funds for vaccination.
And, separately, the UK government has already welcomed the HSBC Vaccine Investment ISA that allows UK retail investors to join institutional investors in investing in vaccine protection at a competitive rate of return. It is open until 24 April 2009.
The challenge now is to build rapidly on this experience – developing products for pension funds, insurance companies and other institutional investors initially and perhaps also for retail investors later.
Stimulus packages need to leverage private investment into the new green economy, they said. And there is an emerging consensus that well designed “green bonds” are an important part of this. Because this investment is urgent, these bonds need financial characteristics already well understood by investors. They need to look attractive as conventional fixed income investments not as something new and different that can justify only a cautious toe in the water for the next few years.
Luckily, there is already a good example to follow in the work of the International Finance Facility for Immunisation which works with the GAVI Alliance and the World Bank. The IFFIm has created and placed institutional bonds backed by government commitments to bring forward funds for vaccination.
And, separately, the UK government has already welcomed the HSBC Vaccine Investment ISA that allows UK retail investors to join institutional investors in investing in vaccine protection at a competitive rate of return. It is open until 24 April 2009.
The challenge now is to build rapidly on this experience – developing products for pension funds, insurance companies and other institutional investors initially and perhaps also for retail investors later.
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