Governance

Decision-making in the investment sector is opaque even for those within the industry. Understanding what motivates actors within mainstream investment chains, therefore, is key if we are to drive a shift to more sustainable investing. But a wide range of incentives will be required to achieve change across diverse institutional and individual governance structures. How can accountability increase in investment decision making, and how can investor responsibilities realign with societal value creation? Explore ideas below.

730+

730 hard and soft-law policy revisions, across some 500 policy instruments, that support, encourage or require investors to consider long-term value drivers, including environmental, social and governance (ESG) issues.

UNEPFI

61%

61% of investors in this global survey engaged with companies as part of their ESG strategy in 2021.

BNP Paribas

Subtopics

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Fiduciary Duty in 21st Century	Report	21 Oct 2019	United Nations Environment Programme Finance Initiative (UNEP FI) & Principles for Responsible Investment (PRI)	127 mins	Editor’s choice This final report highlights policy recommendations for integrating ESG issues into investment practice as part of the regulatory and legal requirements. www.unepfi.org/wordpress/wp-content/uploads/2019/10/Fiduciary-duty-21st-century-final-report.pdf
The Financial Sector: Redefining a Broader Sense of Purpose	Article	28 Feb 2019	International Monetary Fund	18 mins	Editor’s choice Read here Christine Lagarde’s 32nd World Traders' Tacitus Lecture that outlines the need to rethink the role of finance, focusing on three main aspects: innovation, regulation and responsibility. www.imf.org/en/News/Articles/2019/02/21/sp022819-md-the-financial-sector-redefining-a-broader-sense-of-purpose
Redefining the Purpose of the Investment System	Event summary	07 Dec 2020	Sustainability Accelerator	60 mins	Chatham House / Online / 7 December 2020, 16:30–18:00 GMT Redefining the Purpose of the Investment System
Regulation Database	Database	01 Jan 2021	Principles for Responsible Investment		This PRI database contains over 650 policy tools and more than 300 policy revisions to encourage or require investors to consider long-term values as part of their investment decisions. www.unpri.org/policy/regulation-database
European Commission: Sustainable Finance	Website	04 Jul 2020	European Commission		Explore here the routes by which the EU is approaching integrating sustainability considerations into its financial policies. ec.europa.eu/info/business-economy-euro/banking-and-finance/sustainable-finance_en
An Introduction to Responsible Investment: climate change for asset owners	Website	30 Jun 2020	Principles for Responsible Investment		This guide for asset owners details the role of climate change in responsible investment decisions and practices, why it matters and what actions are needed to shape the investment process. www.unpri.org/an-introduction-to-responsible-investment/an-introduction-to-responsible-investment-climate-change-for-asset-owners/5981.article
Bank 2030: Accelerating the Transition to a Low Carbon Economy	Report	30 Jan 2020	Cambridge Institute for Sustainability Leadership	76 mins	Here, the Cambridge Institute for Sustainability Leadership outlines how banks can play their role in accelerating investments towards a low carbon economy and how a progressive climate bank should look like. www.cisl.cam.ac.uk/resources/sustainable-finance-publications/bank-2030-accelerating-the-transition-to-a-low-carbon-economy
Building a Regulatory Framework for Effective Stewardship	Report	01 Oct 2019	Financial Conduct Authority	71 mins	In this report, the Financial Conduct Authority explains how effective stewardship should look like and what the minimum standards requirements should be for financial firms to promote long-term investments. www.fca.org.uk/publication/feedback/fs19-7.pdf
The Missing Middles: Segmenting Enterprises to Better Understand their Financial Needs	Report	25 Oct 2018	Dalberg	39 mins	In partnership with the Collaborative for Frontier Finance, Omidyar Network and Dutch Good Growth Fund, Dalberg Advisors undertake research to provides distinctions between types of funding gaps for small and growing businesses and identify better targeted financing solutions. dalberg.com/our-ideas/missing-middles-segmenting-enterprises-better-understand-their-financial-needs/
The Trustee Toolkit	Website (Login)	22 Jan 2018	The Pensions Regulator		Use this online learning platform from the Pensions Regulator to browse various learning modules and resources that can support building the minimum level of Trustee knowledge and understanding requirements. trusteetoolkit.thepensionsregulator.gov.uk/
The Kay Review of UK Equity Markets and Long-Term Decision Making	Report	23 Jul 2012	UK Government: Department for Business, Education and Skills	221 mins	This independent review, commissioned by the UK Government, identifies short-termism as a problem in UK equity markets. The causes of this are reported to be a misalignment of incentives within the investment chain, and the displacement of trust relationships by a culture based on transactions and trading. assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/253454/bis-12-917-kay-review-of-equity-markets-final-report.pdf