Saturday, May 2, 2009

The UN Principles for Responsible Investment

Earlier I reminded all of you about the influence University endowments had in bringing down the Apartheid system in South Africa. Students influenced the endowments, which in turn divested from South African securities.

A key reason for this influence is that university endowments are so large. They can move the market with their investment decisions.

In recent years the United Nations put forward recommendations called "Principles for Responsible Investment, available at Targeted at large investors such as pension funds, mutual funds, charitable endowments, it explains professional methodologies for Environmental, Social, and Governance (ESG) investing.

Although there are several important points, one that stands out is the expectation among investment professionals--who, because of their substantial ownership in companies, are in a position to ifluence companies--that they can and should drive corporate behaviors and disclosures.

Next time I'll talk about how your own investment behavior can drive positive behaviors among corporations.

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