Guests:
Steve Lydenberg, Partner of Domini Social Investments; Founding Director, Initiative for Responsible Investment (IRI), Harvard Kennedy School
David Wood, Director, Initiative for Responsible Investment (IRI), Harvard Kennedy School
American pension funds regard responsible investing as an efficient tool to achieve the long-term strategy, while charity foundations tend to use responsible investing to complete specific social projects, such as relieving poverty and climate change, etc.
Boards of pension funds prefer to employ investment advisor to communicate ESG problems with companies. Meanwhile, more institutional investors have indicated that the negative externality and rate of return of the investment should be weighted in order to ensure the long term benefit. For example, the funds will invest huge amount of money into poverty relieving projects or even donating in exchange for considerable social impacts. This kind of social targeted investment, or ‘impact investment’, will contribute to the social development through financial innovation.
How does the data supplier serve more diversified investors? In response to the question, Steve indicated that it is hard to find a corresponding business solution. In the US, some community development banks have developed the evaluation system for community development institutions, the data of which could be accessed conveniently for financial institutions. The workload of data collection and processing into useful information is huge, and the diversity of securities makes it even more difficult. Steve suggested that the development of a general investment principle would provide guidance for investors.
Original Report: http://csr.stcn.com/2014/1015/11775200.shtml
