One size won't fit all
When measuring sustainability, one size won’t fit all. That’s one of the conclusions of a recent Corporate Responsibility symposium organized in Amsterdam by the Green Place on the application of Environmental, Social and Governance (ESG) sustainability criteria to investments. The event brought together asset managers, asset owners, regulators, analysts and CSR managers to discuss “Mainstreaming ESG: Creating a winning formula for the triple bottom line”.
Discussion points included whether a standard for following ESG criteria was possible and what upcoming legislation on a regional European level we can expect. Much of the investor community is being criticized for being short-termist and reaching for low-hanging fruit only when it comes to applying ESG to investment policies. The low-hanging fruit refers, for example, to exclusion policies and questioning high executive pay. At a time when environmental and social concerns have morphed into risk management, investors and corporations should be addressing wider ESG more seriously. Yet, according to Marleen Janssen Groesbeek of Eumedion, investors and companies are struggling to achieve a coherent standard approach to monitoring and measuring ESG criteria.
If no one foresees a standard approach evolving in the near term, what next? Harald Walkate of Aegon Asset Management believes a standard procedural approach will emerge, with an “investor toolbox” offering a range of tools enabling investors to pick the ones that work best in each given case.
APG sustainability specialist Erik-Jan Stork stressed the importance of finding the appropriate data in comparing companies in order to make informed asset selection decisions for the longer term. This brings to question the credibility of such wide-reaching indices as the DJSI and many researchers, asset managers and companies are now re-evaluating the accuracy of its ratings.
Márcia Balisciano, CSR manager of Reed Elsevier, explained her company’s quest for greater corporate sustainability. She believes companies should take into consideration the full spectrum of non-financial performance as she strongly believes it adds economic value in the longer term. Maybe we should consider another definition for the ESG acronym, how about “Earn Stakeholder Goodwill”.
The speakers at the Green Place Symposium advocated a smart mix of voluntary and regulatory measures to graft sustainability concerns more firmly onto the bedrock of the world economy. T his is a realistic solution and one that we at The Green Place wholly endorse.
Vicky Valanos is Chief CSR Strategist of The Green Place @ Media Wise