UNEP FI 2005 Global Roundtable
25-26 October 2005 | UN Headquarters — New York, USA
UNEP Press Release
Institutional Investors' Legal Responsibilities on Environmental,
Social and Governance Issues under Spotlight
NEW YORK/NAIROBI, 25 October 2005 -- Institutional investors
have a far greater opportunity - and in some cases a legal obligation -
to incorporate environmental, social and governance issues into their
investment decision-making than is traditionally believed.
This is the conclusion of a new study, done on behalf of the United
Nations Environment Programme’s Finance Initiative (UNEP FI).
The study finds that the integration of environmental, social and
governance (ESG) issues into investment analysis, so as to more reliably
predict financial performance, is clearly permissible and is arguably
required in all jurisdictions.
The study, launched today at United Nations headquarters, has been
compiled by leading international law firm Freshfields Bruckhaus
Deringer.
The 150-page report, which focuses on the largest capital markets
jurisdictions - Australia, Canada, France, Germany, Italy, Japan, Spain,
the United Kingdom and the United States, also considers the likely
evolution of the interpretation of the law with respect to investors and
ESG issues. The study is entitled: "A legal framework for the
integration of environmental, social and governance issues into
institutional investment".
Klaus Toepfer, Executive Director of UNEP, commenting on the study,
said: "This is groundbreaking work that will accelerate the integration
of ESG issues into the mainstream investment community worldwide. What
was once considered a niche area is set to become mainstream as
institutions with trillions of dollars under management embed ESG
thinking into their investment approach."
He added: "As the world's largest pension schemes, government funds,
insurance reserves and foundations adjust, this will set in train a new
dynamic along the investment chain. When these large institutional
investors move on ESG issues the broader markets will listen and react."
Paul Watchman, Partner at Freshfields Bruckhaus Deringer and senior
author of the study, told more than 450 participants at the two-day UNEP
FI 2005 Global Roundtable meeting at UNHQ that: "We are not suggesting
that investors pursue a moral crusade but, in most jurisdictions, the
law gives a wide discretion, encircled by general duties rather than
exacting standards. A number of the perceived limitations on investment
decision-making are illusory.”
Mr. Watchman explained that those advocating a greater regard for ESG
issues in investment decision-making often encounter resistance on the
basis of a belief that institutional principals and their agents are
legally prevented from taking account of such issues. "Far from
preventing the integration of ESG considerations, the law clearly
permits and, in certain circumstances, requires that this be done", he
said.
Mr. Watchman, a keynote speaker at the UNEP FI Global Roundtable of
bankers, insurers and asset managers, as well as government and civil
society representatives, continued: "It's not everyday that commercial
lawyers have the opportunity to challenge industry to be more
courageous, but that is the position in which we find ourselves having
produced this report for the UNEP FI.”
The report's lead author concluded by stressing that: "Institutional
investors have more freedom to integrate ESG issues into their
decision-making than they think. Whilst normally we find ourselves
encouraging our clients to be more cautious, in this case we can instead
say 'be more imaginative'."
About the UNEP FI Global Roundtable Initiated in 1994, the UNEP FI
Global Roundtable has spanned the globe from Chicago to Frankfurt, and
from Rio de Janeiro to Tokyo. It is now recognised as the premier
finance and sustainability event, gathering the most influential
practitioners in the field.
Over 450 participants from the financial services sector, government
agencies, civil society, academia and the broader corporate world are
attending the 2005 Roundtable in New York, with official sponsors
including Bank of America, ABN AMRO, JPMorgan Chase, Westpac and
Deutsche Bank.
Under the theme of "A World of Risk: A World of Opportunities?", the
Roundtable will be the scene for cutting-edge discussions around themes
following the business lines of financial institutions and is designed
to help decision-makers explore the real risks and opportunities arising
from complex sustainability challenges.
Among the highlights of the event will be the release of the
Freshfields Bruckhaus Deringer study and the announcement of preliminary
findings of UNEP FI’s second round of research on the materiality of
environmental, social and governance issues to securities valuation.
For more information on UNEP FI's Global Roundtable see
www.unepfi.org
Editor's Notes
Freshfields Bruckhaus Deringer study
Full title: "A legal framework for the integration of environmental,
social and governance issues into institutional investment"
Available at www.unepfi.org
Contact: investment@unepfi.org
UNEP FI Global Roundtable 2005
Confirmed speakers and moderators include:
Robert Annibale - Head of Global Microfinance Business, Citigroup
Joseph Boren - President and CEO, AIG Environmental
James Cameron - Founder, Climate Change Capital
Bernard Cochemé - CEO, UN Joint Staff Pension Fund
Hendrik Garz - Director Equity Strategy Services, WestLB
Martin Hancock - COO, Westpac (London)
Hanns Michael Hölz - Global Head of Sustainable Development and
Corporate Citizenship, Deutsche Bank
Leo Johnson - Co-Founder, Sustainable Finance
Luiz Maia - CEO, ABN AMRO Asset Management Brazil
Louis Redshaw - Head of Environmental Markets, Barclays Capital
Jesus Tambunting - Chairman and CEO, Planters Bank of the Philippines
Paul Watchman - Partner, Freshfields Bruckhaus Deringer
Vincent Zeller - CIO, Groupama
Sponsors & Supporters: Bank of America, ABN AMRO, JPMorgan Chase,
Westpac, Deutsche Bank, CIBC, Citigroup, Royal Bank of Canada, Calvert
Group, Bank of Tokyo-Mitsubishi, Insurance Australia Group and National
Australia Bank.
UNEP Finance Initiative
The United Nations Environment Programme Finance Initiative (UNEP FI) is
a unique global partnership between UNEP and the private financial
sector. UNEP FI works closely with approximately 170 financial
institutions that are signatories to the UNEP FI statements and a range
of partner organizations to develop and promote linkages between
sustainability and financial performance. Through regional activities,
a comprehensive work programme, training and research, UNEP FI carries
out its mission to identify, promote and realize the adoption of best
environmental and sustainability practice at all levels of financial
institution operations. For more information on UNEP FI, see:
http://www.unepfi.org
Freshfields Bruckhaus Deringer
Freshfields Bruckhaus Deringer is a leading international law firm, with
over 2,400 lawyers in 28 offices in 18 countries across Europe, Asia and
the United States. The environmental, planning and regulatory law
practice is widely recognized as a global leader in the field for the
breadth and depth of its expertise. Freshfields also has a respected
pro bono legal practice, which has enabled the company to work in close
cooperation with international governmental and non-governmental
organizations. |
