Responsible investing in the Financial Times

Two Financial Times articles sent to us from Cheyenna at the Responsible Endowments Coalition caught our attention - one about how responsible investing is further entering the mainstream, and one about how many are looking to responsible investing strategies as a way out of the current financial crisis.

Investing in doing good can be good risk management.

Investing the old-fashioned way, just by looking at a company’s financial statements and deciding how the current share price relates to the fair value of the stock, is so last year.

Instead, the most hard-headed commercially-minded asset managers are talking about a new form of investment process, including a checklist more usually associated with Greenpeace or Oxfam. Climate change, corporate responsibility, human rights – all these come under the banner of sustainable investment, and a broad range of industry participants have simultaneously come to the conclusion this is the way forward.

“It’s not a manifesto for saving the planet, it’s a tool for better assessing risk,” says Charles Cronin, head of the CFA Institute Centre for Financial Market Integrity, EMEA. “It’s just another way of peeling the investment onion.”

Investors sign up to a better world.

As markets collapse, investors are turning to sustainable investment as a possible way out of the maelstrom. (PDF)

The United Nations Principles of Responsible Investment were continuing to gather signatories, said James Gifford, UNPRI’s executive director. “You might expect this agenda to have less salience at the moment,” he said, “but just 20 minutes ago, the Shell pension fund signed up.”

...

“We need a more responsible and sustainable form of capital markets,” agreed David Blood, managing partner of Generation Investment Management, which has continued to win mandates for its sustainable investment strategies in recent weeks.

“This is clearly a horrible crisis, but it is also an opportunity to take stock and think of ways to build a more sustainable form of investment.”

Check them out! It's well-explained, thorough, and interesting reading.