Thursday, June 10, 2010

Canadian Responsible Investment Conference Preview: The view from Europe

by Lisa Hayles, Head of Client Services (North America), EIRIS

Responsible investment asset growth in Europe continues to surpass other parts of the world. Recent figures released by EIRIS show that U.K. investment in green and ethical funds has hit a record high of 9.5 billion pounds sterling (about $14.4 billion dollars). The last Eurosif study revealed that 2.7 trillion euros ($3.4 billion dollars) was invested under SRI guidelines across Europe, representing 17.5% of the total. What lies behind these impressive figures? Though European responsible investors employ similar strategies to their peers in other jurisdictions, a combination of factors has led to both significant growth and the adoption of particular regional approaches.

There is no one-size fits all approach across Europe. Though their fiduciary duty remains paramount, European institutional investors pursue responsible investment strategies to achieve other equally legitimate goals: because they believe these strategies are consistent with being a responsible investment institution; to reflect the view of their members or beneficiaries; in response to public or media concerns; or simply to comply with the law.

In continental Europe, "best-in-class" and thematic approaches are popular with large funds. The FRR and ERAPF in France and the U.K. Environment Agency have all awarded or terminated mandates with explicit reference to ESG considerations. The focus by investors in Scandinavia on compliance with international law (as a result of conventions their nations have signed) has led to highly-publicised divestment decisions around environmental degradation, human rights and labour standards. However, strong “ethical” considerations still dominate in many markets. For example, the concerns of pension scheme members in Denmark and the Benelux countries, coupled with very active media scrutiny of funds’ investments, has led to legislation and resulted in the exclusion of companies with links to cluster munitions or anti-personnel landmines.

In Europe, for a not insignificant minority of investors, the goal of creating a more sustainable and just society is understood to be compatible and in fact essential to sustainable, long-term investment strategies.

On Tuesday, June 15 from 5pm-6:15pm, Cindy Rose of Aberdeen Asset Management, Kees Gootjes of VBDO in the Netherlands and Lisa Hayles of EIRIS will provide an overview of the current state of play in Europe and discuss the drivers of European SRI growth during the "View from Europe" panel at the Canadian Responsible Investment Conference.

Lisa Hayles is Head of Client Services (North America), EIRIS.
Twitter: http://twitter.com/EIRISNews

This is the fourth in a series of articles on the 2010 Canadian Responsible Investment Conference. Subscribe to SRI Monitor for more pre-conference articles over the next couple of weeks and full blogging coverage during the three-day conference.

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