oekom Impact Study 2017
It is a pleasure to welcome these new findings from oekom’s 2017 research study, which show that an increasing number of companies are looking at sustainability. Over half of the global companies surveyed in the study said that sustainability issues were important for their company’s future development. Even more telling is that much of this demand is driven by sustainability rating agencies and the companies’ clients. The study also shows that shareholder initiatives are helping to put sustainability issues more firmly on the radar of many companies. We need look no further than the recent successful climate resolutions passed at Exxon and Occidental to see the power of shareholder actions. Investors worldwide are becoming much more vocal about using their financial muscle to enact real change at the corporate level. In the ten years that the PRI has been in existence, we have seen our investor base increase its engagement with the companies in their portfolios on a range of environmental, social and governance (ESG) issues.
We believe that investors have a critical role to play when it comes to moving ESG forward. It is also good to see that climate change and water consumption were the two issues that are reflected — to various degrees — within the companies’ sustainability considerations. Across the 1,700-strong PRI signatory base, climate change was cited as the number one priority in terms of being a material risk to investors. In May, we saw over 300 investors representing US$ 19 trillion signing a letter urging G7 and G20 leaders to stick by their commitments to the Paris Accord. And, with the release of the final report by the Financial Stability Board Task Force on Climate- Related Financial Disclosures (TCFD), we now, at last, have a framework for companies to disclose how they plan to transition to a two degrees world. Investors can use this framework to push for more disclosure on climate policies. But investors must also follow the TFCD guidelines within their own organisations.
Finally, the study showed that more guidance is needed on the UN Sustainable Development Goals (SDGs). All stakeholders in the financial sector — banks, pension funds, fund managers and others can work to support the incorporation of the SDGs as a way to strengthen financial markets and ensure their future stability. As long-term investors, this is our ultimate goal.
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