Articles

When First Sentier Investors updated our responsible investment (RI) policy two years ago, we knew it wouldn’t be a ‘set and forget’ task. The policy includes a mechanism to be reviewed at least every two years – but two years is a long time in the ESG world, and our latest review led to a number of important updates to the policy and its underlying approach.

The carbon neutral program’s aim is to help catalyze the shift toward a carbon neutral economy and alignment with the Paris Agreement (limiting global warming to 1.5°C). By increasing awareness among capital allocators of funds that are actually carbon neutral, we can remove some of the noise around carbon neutrality, and other funds will be encouraged to follow suit. Credible decarbonisation of portfolios is a must.

The investment world also has a few super massive corporations today. The similarities with these large stars are striking. To many observers, much like the massive stars, such companies look wonderfully positioned with strong growth rates. What’s bubbling beneath this glowing surface, however, is usually a precarious balance between rising risks at the core and growth at the surface that likely will be incrementally harder to come by.

The Sustainable Finance Disclosures Regulation (SFDR) is playing a key role in shaping sustainable finance, but the implementation process is a gradual one, allowing time for input from key stakeholders. Given the length and complexity of the regulatory technical standards (RTS) under SFDR, the European Commission has deferred the next phase of SFDR disclosure requirements.

The European Court of Auditors has examined the European Commission’s sustainable finance plan – to direct investment towards sustainable business activity – and ‘concluded that more consistent EU action is needed.’

Individuals, the ultimate architects of a company and its culture, will need to be honest with themselves and choose whether they want to focus on appearance or substance. Corporate culture has been engrained over decades so strong characters, with character, need to step forward. If you don’t question things, then nothing will ever change.