A new era in responsible investing starts now
There were plenty of takeaways from this year’s record-busting RIA Conference, where 570+ attendees soaked up the latest insight from the field of responsible investing. Perhaps the most significant is this: responsible investing has reached the tipping point. In the words of Michael Jantzi, ESG has a "heft" it’s never had before, and with all the progress we’ve made over the past 30-some years, we’re now, finally, "getting to scale."
Michael is the CEO of research firm Sustainalytics. He’s one of the early pioneers of responsible investing, and a long-time friend and associate of NEI. We were proud to hear it when Michael took time to honour those of us who’ve been "toiling" away for decades, building the foundation of responsible investing brick by brick – and helping get us where we are today.
It wasn’t just Michael who observed the palpable state change in our field. Erika Karp, founder and CEO of Cornerstone Capital, described the positive developments currently underway as "unprecedented." And Harvard University professor John Ruggie – the author of the UN Guiding Principles on Business and Human Rights – said ESG mandates have "begun to deliver" on the promise of strong investment performance.
We may have arrived, but there’s a long way to go
Despite the overall positivity, all agreed there’s plenty of hard work ahead. In fact, Michael observed that as responsible investing grows in prominence, investment managers will be under that much more scrutiny and held to even higher standards of accountability. We’re confident NEI is ahead of the curve in that respect, and well-positioned for continued leadership.
Our main stage panel focused on some of the Sustainable Development Goals laid down by the United Nations. It was a lively discussion, with strong participation from attendees. Many were interested to hear the views of Donna Meyer of Missouri-based Mercy Investment Services, who underscored the importance of health and well-being to a vibrant, productive economy. One of Donna’s missions is to bring to bear the full weight of the global investment community on the opioid crisis. She’s the co-chair and co-founder of Investors for Opioid Accountability, which counts 54 members (including NEI) and $3.5 trillion in collective assets.
On the corporate side, we were joined by Chantale Despres from CN and John Coyne of Unilever Canada. It was John, Co-Chair of Canada’s Circular Economy Leadership Coalition, who offered the most direct call to action for investment management firms over the two-day event. When it comes to corporate transparency and disclosure, he stressed it’s not up to Unilever – or any company for that matter – to set the standards. It’s up to us as asset managers to organize ourselves, demand change from the companies we invest in, and present a cohesive framework to measure responsible corporate performance.
Gender parity on corporate boards was specifically called out as not being at a tipping point. Tina Debos, Senior Consultant of Diversity & Inclusion at Bell, said it’s critical to guard against “fatigue” on this challenge. She observed that investment managers with impact mandates are not yet where they need to be on pushing boards to do more. We put (another) stake in the ground on this matter in March, when we called on institutional investors to join NEI and Addenda Capital in using our voting power to improve board diversity. As of this writing, we’ve gathered global signatories with over $400 billion in collective assets under management.
Expanding the circle of influence
There was a sizeable contingent of financial advisors at the conference, which is a welcome and necessary evolution. John Ruggie, the Harvard professor, identified the "urgent need to drive ESG further into the mainstream." Well, that won’t happen without the full participation of the advisor community. NEI hosted a breakout session aimed at advisors, with the goal of providing practical conversation strategies for better engagement with clients. Our Senior ESG Analyst Rosa van den Beemt moderated the session, with the participation of two advisors who have embraced responsible investing and embedded it deep within their differentiated value proposition.
The other breakout session we hosted tackled the challenge of ensuring a "just transition" as the world moves toward a low-carbon economy. Our Corporate Engagement Manager Jamie Bonham moderated the panel with the participation of the Pembina Institute, Harvard University and Suncor Energy. Communication was a focal point of this session as well. Panelists discussed how to find common ground with stakeholders by using inclusive, non-inflammatory, and most importantly, relatable language for a more productive conversation.
Final words to Michael Jantzi. When it comes to corporate engagement and making a difference in the world, "none of us is too small to have a voice."