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Market News

 August 15, 2007
The Working Capital Report: Responsible Investment

 The United Nations Environment Programme Finance Initiative (UNEP FI) has release The Working Capital Report, providing a review of the development of the Principles for Responsible Investment and "capturing the views of leading thinkers in the field of sustainable finance and responsible investment".

UNEP FI is a partnership between the United Nations and 170 financial institutions with a mandate to develop and promote linkages between the environment, sustainability and financial performance.

Among the Initiative's major achievements are the Principles for Responsible Investment (PRI), voluntary guidelines concerning the integration of environmental, social and governance (ESG) into investment decisions. By July 2007 assets approaching USD 10 trillion, owned or managed by more than 200 major investment organizations from 25 countries, had committed to the Principles.

Over the past four years, the acronym ESG -- environmental, social, and governance -- has rooted itself in the lexicon of the financial services community. Some of the largest finance and investment companies have begun to grapple with the complex business of mainstreaming ESG values within their core business activities.

The Working Capital Report traces a number of the key developments that have accelerated the evaluation of ESG issues within mainstream finance, investment and the capital markets. The report also provides an opportunity for a group of recognised global thought leaders to provide their perspective on recent achievements and the challenges ahead. It closes with an assessment -- informed by the perspectives gathered -- of what might be needed to ensure that ESG values are truly integrated in the marketplace.

As with any evolving area of activity, sustainable finance and responsible investment has created its own community. This community has developed initiatives, institutions, language, including an inevitable growth of acronyms, and a way of operating and interacting. Part of the purpose of the report, therefore, is to provide a straightforward, and to the extent possible, jargon free description of the developments that have contributed to the growth in sustainable finance and responsible investment activity.

According to UNEP FI, the purpose of the report is to:

  • explain the major developments in a manner that enables the broader sustainability community to understand what has happened in the fields of sustainable finance and responsible investment;

  • highlight the drivers for this change within the financial services sector and investment communities and to explore whether the activities underway are driving real change in the marketplace;

  • and draw on the experience and insight of global thought leaders in the area to provide comment on what is working, what is not and what should come next.

Download the full report here (PDF).



Source: United Nations Environment Programme .