Investors signed up to the UN Principles for Responsible Investment are trying to show that they mean business
A group of 52 investors, who manage combined assets of $4.4 trillion, are calling on 9,000 companies to sign up to the UN Global Compact.
Companies under fire include major brands such as Apple, Adidas and Yahoo, who are yet to sign the Compact's 10 guidelines covering human rights, anti-corruption, and environmental protection.
The PRI investor campaign – known as the Seoul initiative, because it originated at the PRI’s annual meeting in South Korea in June – is the initiative's biggest effort to date to pressure companies on ethics.
It is the second example of what the PRI calls “collaborative engagement” – joint action by investors to get companies to commit to responsible business.
In January, Morley Fund Management (now part of Aviva) led a group of 20 PRI signatories, representing $2.13 trillion in assets, to demand that companies meet their disclosure requirements under the Global Compact.
These moves reinforce the PRI’s core message: companies that are good at managing environmental, social and governance issues are more likely to create long-term value for shareholders.
But some would question the value of using the Global Compact as a measure of how serious a company is about ethics.
And it’s not yet clear whether collaborative engagement will succeed in changing the way companies are run.
A PRI spokesperson says: “We’ve got to be realistic. We don’t expect all 9,000 companies to sign up. Every one will be a little bit of success.”
Investors taking part in the Seoul initiative include: Aviva Investors; AXA Investment Managers; BT Pension Scheme; CalPERS; Calvert; F&C Asset Management; Hermes Pensions Management; and Universities Superannuation Scheme.
The PRI will announce how successful it has been at persuading companies to sign up to the Compact at its next annual meeting, in July 2009.
You can read more about responsible investment in the November issue of Ethical Corporation magazine.
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