Ethical Investing
Business sustainability is as much about managing social and environmental issues as delivering price competitiveness, Neville White of Ecclesiastical Investment Management has said.
Mr White, social responsible investment analyst for EIM, said growing pressure on natural resources has meant businesses must be increasingly nimble and also consider the effect of their operations on communities, the environment and on the wider society, rather than just focusing on returns. He said: “The greatest contribution by business is the integration of environmental, social and governance issues into their strategies and operations. The best companies which have learned how to evolve and adapt over 125 years are already making that leap.
“Increasingly investors will come to see the value of these businesses that can manage all of their risks nimbly and astutely as the world grapples with the challenges of a rising population with water, energy and food shortages.”
His comments came as EIM marked its 125th anniversary and published a report looking back 125 years to identify the attributes of sustainable businesses and how business strategies should evolve to meet the challenges of the next 125 years. The report highlighted a few companies which have already embedded socially responsible practices within their business. For instance, Tesco has committed to a zero waste to landfill promise and carbon neutrality by 2050 and Unilever is seeking creating waterless shampoos and the re-engineering of detergents and soaps to use less water.
Mr White said investing has “come a long way in 125 years with a new focus on addressing some of the world’s most compelling societal problems while making a financial return”. He said when the first dedicated UK ethical fund launched in 1984, it was thought so strange that it was dubbed “Brazil Fund” because anyone would have to be nuts to invest in it. Despite this initial hesitation, there are now more than 80 dedicated ethical and responsible investment funds in the UK with more than £11bn assets under management.
Mr White said: “Socially responsible investing can create sustainable long term wealth for all stakeholders. We need to learn to appreciate that doing business better will ultimately make for better business. Responsible investment is no longer a niche, it makes good business sense.”
Source : FT Adviser
By Julia Bradshaw | Published May 31, 2012