ESG policy important in eyes of investors

Investors are focusing more on environmental and social impact of potential investees, including use of plastic, gender diversity and response to modern slavery. A panel on “under the radar risks” at the Pensions and Lifetime Savings Association's annual conference Thursday highlighted this shift in investor focus.

Carlota Garcia-Manas, a senior investment stewardship analyst for Church Commissioners and Church of England charitable endowment, a group with over $11 billion in assets, said that when making decisions on investments, her groups are analysing social and environmental risk as well as economic. She highlighted the necessity for gender diversity within investee companies, stating that "from 2019, [The Church of England] are newly voting in U.S. and Europe against chairman of a nomination committee if at least one women is not on the board”.

Other members of the panel highlighted factory farming and antibiotic use as risks for investors, as well as plastic use. Carola van Lamoen, head of active ownership at Robeco, stated that she has been focusing on reducing single use plastic as part of ESG policy.

Incorporation of ESG policy is becoming increasingly important to companies for a number of reasons, from recruitment to profit generation. The concerns of investors highlighted at the Pensions and Lifetime Savings Association conference further reinforce this trend.

Sonja Duncan