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2005 Global RoundtableA world of risk. A world of opportunities?

UNEP FI 2005 Global Roundtable

25-26 October 2005 | UN Headquarters — New York, USA

Press conference and press release

Institutional Investors' Legal Responsibilities on Environmental, Social and Governance Issues under Spotlight



Left to right: Martin Hancock, COO, Westpac (London); Monique Barbut, Director, UNEP Division of Technology, Industry and Economics; James Mahoney, Director of Public Policy, Bank of America; Paul Watchman, Partner, Freshfields Bruckhaus Deringer; Paul Clements-Hunt, Head of Unit, UNEP Finance Initiative

View the UNEP FI Roundtable press conference (0:35:31 mins) (requires RealMedia player)

UNEP Press Release

Institutional Investors' Legal Responsibilities on Environmental, Social and Governance Issues under Spotlight

NEW YORK/NAIROBI, 25 October 2005 -- Institutional investors have a far greater opportunity - and in some cases a legal obligation - to incorporate environmental, social and governance issues into their investment decision-making than is traditionally believed.

This is the conclusion of a new study, done on behalf of the United Nations Environment Programme’s Finance Initiative (UNEP FI).

The study finds that the integration of environmental, social and governance (ESG) issues into investment analysis, so as to more reliably predict financial performance, is clearly permissible and is arguably required in all jurisdictions.

The study, launched today at United Nations headquarters, has been compiled by leading international law firm Freshfields Bruckhaus Deringer.

The 150-page report, which focuses on the largest capital markets jurisdictions - Australia, Canada, France, Germany, Italy, Japan, Spain, the United Kingdom and the United States, also considers the likely evolution of the interpretation of the law with respect to investors and ESG issues.  The study is entitled: "A legal framework for the integration of environmental, social and governance issues into institutional investment".

Klaus Toepfer, Executive Director of UNEP, commenting on the study, said:  "This is groundbreaking work that will accelerate the integration of ESG issues into the mainstream investment community worldwide.  What was once considered a niche area is set to become mainstream as institutions with trillions of dollars under management embed ESG thinking into their investment approach."

He added:  "As the world's largest pension schemes, government funds, insurance reserves and foundations adjust, this will set in train a new dynamic along the investment chain.  When these large institutional investors move on ESG issues the broader markets will listen and react."

Paul Watchman, Partner at Freshfields Bruckhaus Deringer and senior author of the study, told more than 450 participants at the two-day UNEP FI 2005 Global Roundtable meeting at UNHQ that:  "We are not suggesting that investors pursue a moral crusade but, in most jurisdictions, the law gives a wide discretion, encircled by general duties rather than exacting standards.  A number of the perceived limitations on investment decision-making are illusory.”

Mr. Watchman explained that those advocating a greater regard for ESG issues in investment decision-making often encounter resistance on the basis of a belief that institutional principals and their agents are legally prevented from taking account of such issues.  "Far from preventing the integration of ESG considerations, the law clearly permits and, in certain circumstances, requires that this be done", he said.

Mr. Watchman, a keynote speaker at the UNEP FI Global Roundtable of bankers, insurers and asset managers, as well as government and civil society representatives, continued:  "It's not everyday that commercial lawyers have the opportunity to challenge industry to be more courageous, but that is the position in which we find ourselves having produced this report for the UNEP FI.”

The report's lead author concluded by stressing that: "Institutional investors have more freedom to integrate ESG issues into their decision-making than they think. Whilst normally we find ourselves encouraging our clients to be more cautious, in this case we can instead say 'be more imaginative'."

About the UNEP FI Global Roundtable Initiated in 1994, the UNEP FI Global Roundtable has spanned the globe from Chicago to Frankfurt, and from Rio de Janeiro to Tokyo. It is now recognised as the premier finance and sustainability event, gathering the most influential practitioners in the field.

Over 450 participants from the financial services sector, government agencies, civil society, academia and the broader corporate world are attending the 2005 Roundtable in New York, with official sponsors including Bank of America, ABN AMRO, JPMorgan Chase, Westpac and Deutsche Bank.

Under the theme of "A World of Risk: A World of Opportunities?", the Roundtable will be the scene for cutting-edge discussions around themes following the business lines of financial institutions and is designed to help decision-makers explore the real risks and opportunities arising from complex sustainability challenges.

Among the highlights of the event will be the release of the Freshfields Bruckhaus Deringer study and the announcement of preliminary findings of UNEP FI’s second round of research on the materiality of environmental, social and governance issues to securities valuation.

For more information on UNEP FI's Global Roundtable see www.unepfi.org

Editor's Notes

Freshfields Bruckhaus Deringer study
Full title: "A legal framework for the integration of environmental, social and governance issues into institutional investment"
Available at www.unepfi.org
Contact: investment@unepfi.org

UNEP FI Global Roundtable 2005
Confirmed speakers and moderators include:
Robert Annibale - Head of Global Microfinance Business, Citigroup
Joseph Boren - President and CEO, AIG Environmental
James Cameron - Founder, Climate Change Capital
Bernard Cochemé - CEO, UN Joint Staff Pension Fund
Hendrik Garz - Director Equity Strategy Services, WestLB
Martin Hancock - COO, Westpac (London)
Hanns Michael Hölz - Global Head of Sustainable Development and Corporate Citizenship, Deutsche Bank
Leo Johnson - Co-Founder, Sustainable Finance
Luiz Maia - CEO, ABN AMRO Asset Management Brazil
Louis Redshaw - Head of Environmental Markets, Barclays Capital  
Jesus Tambunting - Chairman and CEO, Planters Bank of the Philippines
Paul Watchman - Partner, Freshfields Bruckhaus Deringer
Vincent Zeller - CIO, Groupama

Sponsors & Supporters: Bank of America, ABN AMRO, JPMorgan Chase, Westpac, Deutsche Bank, CIBC, Citigroup, Royal Bank of Canada, Calvert Group, Bank of Tokyo-Mitsubishi, Insurance Australia Group and National Australia Bank.

UNEP Finance Initiative
The United Nations Environment Programme Finance Initiative (UNEP FI) is a unique global partnership between UNEP and the private financial sector.  UNEP FI works closely with approximately 170 financial institutions that are signatories to the UNEP FI statements and a range of partner organizations to develop and promote linkages between sustainability and financial performance.  Through regional activities, a comprehensive work programme, training and research, UNEP FI carries out its mission to identify, promote and realize the adoption of best environmental and sustainability practice at all levels of financial institution operations.  For more information on UNEP FI, see: http://www.unepfi.org

Freshfields Bruckhaus Deringer
Freshfields Bruckhaus Deringer is a leading international law firm, with over 2,400 lawyers in 28 offices in 18 countries across Europe, Asia and the United States.  The environmental, planning and regulatory law practice is widely recognized as a global leader in the field for the breadth and depth of its expertise.  Freshfields also has a respected pro bono legal practice, which has enabled the company to work in close cooperation with international governmental and non-governmental organizations.

MEDIA
A press conference for the UNEP Finance Initiative Global Roundtable will take place at 11:15 a.m. on 25 October 2005 in the pressroom of the United Nations Secretariat building (Room S-226).  Key participants and organizers will be available to take questions on the hopes and aspirations for the year’s major event on finance and sustainability:

Monique Barbut, Director, UNEP Division of Technology, Industry and Economics
Martin Hancock, COO, Westpac (London)
James Mahoney, Director of Public Policy, Bank of America
Paul Watchman, Partner, Freshfields Bruckhaus Deringer
Paul Clements-Hunt, Head, UNEP Finance Initiative

For more information, please contact:
Nick Nuttall, UNEP Spokesperson, Office of the Executive Director, in Nairobi, on Tel: +254-20-623084, Mobile: +254-733-632755 or +41-79-596-5737, e-mail: nick.nuttall@unep.org; or Elisabeth Waechter, UNEP Associate Media Officer, on Tel: +254-20-623088, Mobile: +254-720-173968, e-mail: elisabeth.waechter@unep.org

In New York Jim Sniffen, UNEP Information Officer, on Tel:  +1-212-963-8094/8210, Mobile:  +1-917-742-2218, e-mail: info@nyo.unep.org

UNEP News Release 2005/51

 


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