Twenty of the world's largest investment companies – including Credit Suisse Group, Goldman Sachs, HSBC and Morgan Stanley – have launched a program in partnership with the United Nations "Global Compact" that will seek to make the consideration of social and environmental issues – including human rights and climate change – part of mainstream investment analysis and decision-making.
The chief executive officers of the companies, representing $6 trillion in assets worldwide, officially backed the initiative, "Who Cares Wins", at a summit of business leaders at UN Headquarters in New York City.
The companies agreed to begin work "connecting financial markets" to environmental, social and governance criteria, and agreed on steps to bring other actors in the financial world, including stock exchanges and pension funds, into accord on how these factors could become standard components in the analysis of corporate performance and investment decision-making.
"Investment companies, which contribute the fuel to the global economy, increasingly recognize that analyzing the corporations they recommend and invest in on the basis of social and environment issues must be central in their work", said Gavin Power, senior advisor at the United Nations Global Compact. "It is clear that in today's world, businesses that ignore issues such as human rights abuses, poor working conditions and climate change risk doing so at their own peril. They are exposed to lawsuits, damage to their reputations and can even lose their ability to operate in important markets. This report represents the beginning of a sea change in approach vis-a-vis the financial community, and should ultimately help make globalization a process that benefits more people, including the world's poorest".
The companies agreed to pursue a range of recommendations, including introducing internal incentive systems to reward analysis in this area, stating: "We are convinced that a better consideration of environmental, social and governance factors will ultimately contribute to stronger and more resilient investment markets, as well as contribute to the sustainable development of societies".
Who Cares Wins: Connecting Financial Markets to a Changing World; Recommendations by the financial industry to better integrate environmental, social and governance issues in analysis, asset management and securities brokerage is endorsed by ABN Amro, AXA Group, Banco do Brasil, Bank Sarasin, BNP Paribas, Calvert Group, CNP Assurances, Credit Suisse Group, Deutsche Bank, Goldman Sachs, Henderson Global Investor, HSBC, Innovest, ISIS Asset Managmement, KLP Insurance, Morgan Stanley, RCM, UBS and Westpac. A complementary report on "The Materiality of Social, Environmental and Corporate Governance Issues to Equity Pricing" was also issued, by the U.N. Environment Programme's Finance Initiative.
Copies of "Who Cares Wins" are available from the Global Compact Office, globalcompact@un.org. For more information, contact Matthias Stausberg, 917-367-3423, stausberg@un.org, the Global Compact Office, United Nations.
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