In financial markets, sustainable development is a trending topic. This is demonstrated, among other things, by the soaring number of sustainability-related initiatives and commitments. Investors can lose sight of the forest for the trees as a result. In this study, we shed light on the most prevalent sustainability initiatives and the drivers behind investors’ choices to participate.
We observe many variations in form, execution, and outcome when it comes to initiatives. Depending on the type of initiative, investors can support, commit to, participate in, or utilize the initiatives. Also, whereas one initiative is somewhat non-committal, others demand a concrete and active effort. Some initiatives are so popular that there is a waiting list for processing new participation.
All pension funds and asset managers in our scope support the UN-PRI. The Net-Zero Asset Managers Initiative is supported by 90% of the asset managers, however, the Net-Zero Asset Owner Alliance is supported by only 10% of the pension funds.
We offer a number of recommendations in addition to our observations. For instance, making an accurate evaluation of sustainability initiatives is crucial. Investors should assess whether a commitment truly affects change or if it is just a distraction from the genuine issues at hand. Independent of variations in the underlying principles and the level of (non)-commitment, it’s crucial for investors to accept responsibility.
Collaboration between investors, academics and civil society organizations, or non-governmental organizations must ensure that meaningful and scientifically substantiated interpretation is given to initiatives and their underlying standards.
For questions about the report please contact Lucienne de Bakker.
The Dutch report can be found here.
