28 November 2022
Round Table Summary (Heads of Responsible Investing): Maintaining Long-Term Vision in a Short-Term World
The round table brought the Heads of Responsible Investing together to examine the short-term challenges to maintaining responsible investing policies and how they may conflict with long-term RI goals.
Discussion topics included:
- Clearly-defined objectives:
- Identify defensible short-term milestones that can gauge progress and that are aligned with long-term objectives.
- Short-term targets tend to be more readily achieved and are also more resilient because they are adaptable.
- Define the changes that must be made in investment beliefs, along with tactics that outline the appropriate response when navigating short-term conflicts.
- Engagement versus divestment:
- Engagement is more effective with private companies when it comes to easily achievable short-term changes that align with long-term objectives.
- Divestment was felt to be a double-edged sword as RI action would not want to cut off funding for climate transition infrastructure.
- Strategic planning: embed ESG factors into the annual capital market assumption generation that feeds into annual investment planning, including the definition of appropriate carbon reduction benchmarks.
- Embrace sovereign debt in addition to equity as leveraging the terms on which credit – either bond issuance or bank financing – could have a more profound universal impact over both short- and long-term horizons.