New Report Illuminates Six Conundrums of Responsible Investing
The meaning of investment stewardship when considering optimal financial returns and ethical, environmental and social principles.
21 November 2023
Singapore, 21 November 2023 – Capital is a powerful tool for shaping a better world. However, investors often had to contend with conflicting priorities. How should investors address the paradoxes of responsible investing?
Stewardship Asia Centre (SAC) is pleased to announce the release of its latest research report, “Investing for a Better World: Navigating 6 Paradoxes,” which examines the role of capital in creating social, environmental, and economic impact. The report comes at a time of rising emphasis on ESG (Environmental, Social and Governance) practices alongside mounting anti-ESG sentiments.
“The Stewardship Asia report on “Investing for a Better World” is a very insightful contribution to the ongoing debate about ESG. It comes at the perfect time as Sustainable Finance is confronted by serious headwinds,” said Emmanuel Rondeau, a visiting professor at the London Institute of Banking & Finance and the Lead Non-Executive Director for La Banque Postale in France. “On one hand, the financial industry has to deal with the complexities of ESG implementation. It is far from being a straightforward and simple transformation. On the other hand, significant pushback is coming from the US. The Stewardship Asia report will help us all navigate towards key milestones in our ambitions for a better world.”
The study represents a collection of insights and recommendations from over 30 industry leaders and thought leaders in the investment community.
“This research paper represents the collective wisdom of the asset manager and asset owner community on the challenges they must navigate and mindsets they must embrace as they use capital to move the dial on environmental and social sustainability impact. We are thankful for the time and effort made by the community to be part of this research,” said Sunil Puri, Head of Research and Engagement at Stewardship Asia Centre.
“Investing for a Better World: Navigating 6 Paradoxes” examines six key paradoxes of sustainable investing:
- Value and Values Philosophy: How to deliver value without compromising values?
- Exclusion and Inclusion Approach: How to balance ‘doing more good’ with ‘doing less harm’ in responsible investing?
- Duty of Prudence and Loyalty: How to fulfil the twin duty of prudence and loyalty as a fiduciary while investing in ESG?
- Long-term and Short-term Time Horizon: How to evaluate ESG factors to balance immediate financial returns with long-term value creation?
- Solo and Collaborative Engagement: How to balance one-on-one engagement with a collective influence approach?
- Resourcing for Influence and Scalability: How to optimise resources to engage meaningfully with a larger pool of investee companies?
The research report aims to identify motivations, priorities and barriers in driving sustainable investment practices. It also highlights practical tools and tips that investors may embrace as they address the six enigmas. The SAC research also intends to ignite a broader discourse on how investors and other key stakeholders can collaborate to overcome these challenges, as well as build a mutually beneficial outcome for shareholders and society at large.
Please scan to download the report: