Responsible investment: Bigger than Brexit

While EU legislation around climate change and reporting has been important, responsible investment is a global trend.

Leslie Gent, head of responsible investment at Coutts, says, “We decided to become a responsible investor because it was the right thing to do. Brexit won’t impact our determination to pursue an approach that protects the long-term interest of our clients.

 “The United Nations Sustainable Development Goals are one of the most important frameworks for responsible investment worldwide. So a changing relationship with the EU won’t lead to any changes to the standards we’ve set so far.”

Bigger than government

Responsible investment isn’t just about legislation. The action of individuals and private organisations has been – and must be – just as important. This is most clearly shown in regard to climate change.

 “We can see the passion of individuals in the climate extinction demonstrations this week or the determination of Greta Thunberg to confront world leaders with the facts of climate change,” says Leslie. “But it’s easy to forget that companies and corporations are collections of individuals, and many of these people share the concerns about the environment we see voiced on the streets.”

Worldwide, companies representing $39 trillion of market capitalisation – or 72% of the MSCI World Index, by value – have publicly expressed support for tackling climate change, including 75% of the energy sector. (Source: UN Principles of Responsible Investment)

Half of this support comes from US companies, and the ‘We Are Still In’ movement is further evidence of how private organisations in the US have taken on the responsibility of combatting climate change, even as their government steps aside. When President Trump announced in 2017 that the US was stepping away from the commitments it made on carbon emissions as part of the Paris Agreement, many US companies and civil authorities stepped forward to reinforce their commitment to the emissions goals, regardless of official US policy. Signatories now include 2,208 companies and investors.

 “All of this shows how sustainability concerns transcend politics,” says Leslie. “From individuals to investors to corporations, people are side-stepping or ignoring government action to take control of the agenda and deliver sustainable policies on their own accord.”