SRI, ESG, CG, UN PRI, FinSIF, ICGN, Eurosif, GC,EITI, CDP, TI…
First steps within Responsible Investments can be confusing as the industry utilizes a wide variety of concepts that are all typically referred to by their own, sometimes cryptic, acronyms. Furthermore the new concepts are being churned out, all with their respective acronyms, with a lightning speed.
The vast and rapidly changing array of different acronyms depicts a young, rapidly growing industry. In this sense, working within responsible investments reminds me of working within technology companies in the late 90’s. A newly developed fast growing industry attracts people and organizations not only from the core industry but from the sidelines as well. All trying to establish their sometimes hastily developed business practices with a hope of setting the industry standard and grasping the decisive part of the market.
This is a natural part of the industry life cycle and such all fine and well.The devil, however, is in the detail. Not everything that can be claimed sustainable and responsible, really is sustainable and responsible. As I argued in earlier posts, corporate responsibility issues are context specific, subjective and notoriously difficult to judge.
What to do then if you are looking for responsible investment solutions?
First of all, read the fine print. There is an increasing amount of responsible investment solutions at the market. Most of them good, some of them bad, and while small, rapidly increasing amounts are downright ugly. Second, once you have chosen your solution be it fund, partnering company or a research provider; make sure that they have rigid and legitimate system to manage their quality including their conflicts of interest. Third, follow up and measure. The good turns ugly faster that you can say “legal process to change the investment fund prospectus”.