yourSRI Sustainable Finance Yearbook 2013
Topics like the overuse of resources, environmental pollution as well as climate change are megatrends shaping the future and will certainly change the way we’re doing business and the way we invest. Additionally, the financial market crisis has shown that it is no longer enough to simply consider the three “traditional” dimensions risk, return and liquidity.
Over the past few years, sustainable or socially responsible investments (SRIs) have strongly gained momentum and become an integral part of the investment world. The number of dedicated SRI products has nearly doubled within the last 5 years. However, in the same time, there is still confusion in the market about defining an absolute term, concept and methodology for „sustainability“ – and some forms of „sustainability“ seem to be more sustainable than others.
Institutional and retail investors are becoming increasingly aware of the potential risk and value impact of environmental, social, and governance (ESG) factors, and their potential effect on an investment profile. A common motivation for integrating ESG into the investment process is to actively manage key factors that are believed to be important drivers of risk and returns. In this context, ESG factors are seen as both a risk and an opportunity to select better-managed companies.
So overall, the definition of best practice in ESG integration is evolving very quickly. A few years ago, being a UN PRI signatory was considered as advanced – it is now seen as a requirement for large institutional asset managers. Instead, the current focus is shifting to measuring ESG factors and the effectiveness of integration and there is a strong demand for rigorous ESG research, analysis and ratings products coming onto the market.
For this purpose this year’s World’s Sustainable Finance Yearbook created by yourSRI and CSSP aims to give you a more detailed insight into the world of responsible investing and current best practice solutions.