Environmental Social Governance (ESG)

Three key learnings from a global gathering on climate change

By Adam Kirkman
Head of ESG Sydney, Australia

The annual PRI in Person conference was held in Paris this year, with the theme of Responsible investment in an age of urgent transition. Despite the complexity of the existential crisis we face, there were three simple take-aways from the mass gathering.

The conference was the largest responsible investment conference ever held, with 1,700 delegates, over 100 speakers and approximately A$80 trillion in funds under management represented.

The PRI is the largest advocate for responsible investing in the world and is supported by, but not part of, the United Nations. It encourages investors to use responsible investment to enhance returns and better manage risks and engages with global policymakers regarding environmental, social and governance (ESG) issues impacting investors and, ultimately, society as a whole. The PRI is supported by global signatory base representing a majority of the world’s professionally managed investments.

So, what were the key messages?

It’s climate change and it’s urgent

The conference’s focus on climate change-related issues was timely with teenage climate activist Greta Thunberg, student climate strikes and the UN Climate Action Summit dominating headlines particularly in the past few months. Climate change appears to be very much the main ESG issue investors are thinking about with the inevitable policy response by governments around the world acting as both a carrot and a stick – investors are simultaneously looking at how they can decarbonise their investments and benefit from the uptake in low-carbon technologies.

Il meglio è l'inimico del bene… don’t let perfection be the enemy of good

The UN’s Sustainable Development Goals (SDGs) call for urgent action to address some of the world’s most pressing problems, time is marching on and we all need to get on with the job of achieving them. Many investors are grappling with how to measure the impact of their investments, what SDGs they can invest in and how, whether their investment is directly contributing to getting closer to achieving the SDGs, etc. Meanwhile the 2030 deadline for achieving the goals gets closer. The message from the PRI was a resounding “just get on with it”.

Raising the bar for signatories

The PRI is going to be raising their expectations of its signatories. To date the PRI has taken a fairly accommodating stance regarding the extent to which its signatories have integrated the six principles of responsible investment. That is set to change with the requirements of signatories being increased and the threat of being de-listed now a reality from 2020 onwards.

AMP Capital signed up to the PRI in April 2007. We believe that the implementation of the six principles will result in better quality investment outcomes for our clients, and closer alignment between our own objectives and those of society at large. We welcome the increased ambition and focus the conference has sought to foster.

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Adam Kirkman, Head of ESG
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While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided.

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