2016: A Pivotal Moment for Responsible Investing

2016: A Pivotal Moment for Responsible Investing

The Bridge from Wall Street to Main Street

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John Steuer, CEO of Calvert Investments

Thursday, December 3, 2015 - 10:15am


by John Streur, President and CEO of Calvert Investments

The Sustainable, Responsible Impact Investing (SRI) industry and my company, Calvert Investments, are at a unique moment in our history. As trailblazers in the socially responsible investment movement, we have spent years defending our perspectives and convincing the mainstream of our value. Today, we see signs that point to a sea change in attitudes about responsible investing. Leading corporations are expanding sustainability activities because they benefit the bottom line and stakeholders. Large wirehouses and traditional asset managers are now quick to discuss how ESG factors into their product mix and investment theory. Even as ESG goes “mainstream,” responsible investors with seasoned points of view on sustainable, ethical business must stay in front and drive continued, accelerated progress that proves the value of our approaches and matches the scale and scope of global challenges. But how do we judge success? What does it take to be a responsible investor?

Success in our field has always required insightful analysis of corporate financial information. Success in responsible investing requires capitalizing on rich sets of non-financial information that help us to understand corporate behavior. Recognizing this, Calvert has overhauled our research process, shifting from binary decision-making to a data-focused, quantitative system for rating and ranking corporate ESG performance. Using this system allows us to identify the leaders, the laggards, and every relative ranking in between. We are cooperating with industry peers in a pre-competitive manner to ensure that corporate disclosure of ESG factors continues to improve and that capital market players continue to learn how to use sustainability information for investment decision-making. We are working to ensure that new tools are developed to help identify and incorporate the value of natural capital, such as forests, biodiversity, and water, into financial models.

Succeeding as a responsible investor requires more than managing data to achieve the best financial returns. Success requires combining analysis with activism and encouraging corporate behavior that produces inclusive, sustainable, long-term value. Responsible investors share a long history of effective corporate engagement that has led to significant shifts in how companies consider and respond to sustainability challenges. We must continue to prioritize this work and use it to differentiate our value—and values—in a crowded marketplace.

As a community, we must stay true to our history and our common goals. In the face of mainstream competition, we must constantly test our assumptions and challenge ourselves to do better. We must continue to innovate and lead, understanding that one day, all investing may be “responsible” investing.

Read John's full post at- http://www.greenmoneyjournal.com/december-2015/streur/


Cliff Feigenbaum, founder and managing editor
GreenMoney Journal and GreenMoney.com