UK - Long term returns can only be safeguarded through the integration of social, ethical, environmental and governance issues with mainstream equity and credit analysis, according to Insight Investment.
Head of equities, Sandy Black, said the asset management industry has traditionally failed to include issues of long term significance - such as climate change, health and obesity - in its research.
“Ignoring these factors can have significant consequences and financial implications,” Black said. “Insight therefore believes the integration of socially responsible investment with the mainstream is the answer to this dichotomy. The next step is for this issue to be included in mandates.
He claimed that such mandates would act as catalysts to a change in approach.
When considering long-term factors, one must not only evaluate the risk they pose, but also the opportunities they present, explained head of research Nick Anderson.
Rory Sullivan (pictured), head of investor responsibility, mentioned litigation and regulation as examples of the downside risks to companies that fail to properly implement socially responsible investment.
He added that a few years down the line, a practice that was currently accepted by society could be considered objectionable.
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