Periodically, we explore cross-cutting topics of interest in sustainable investment, through a mix of contextual overviews, insights and occasionally guest contributions from experts in the field.
For this first quarter of 2024, we take on the issue of transparency.
The pressure to meet sustainability commitments is rising exponentially.
By now, we have little time left to take decisive action on many critical issues, such as keeping planetary temperature rise at manageable levels, preserving biodiversity and ocean health, and enabling incomes for people that can support dignified lives and social cohesion in our communities.
Sustainable investment is critical
Addressing these complex sustainability challenges successfully requires governments, companies, civil society, and investors to work together. Naturally, investment and capital markets have a significant role to play in the equation. A massive mobilisation of private sector capital is needed to shift companies and their activities towards entirely new systems of value creation that are aligned with sustainability.
Here, investment institutions such as us, employing our ability to direct capital towards reaching these sustainability goals, can be important actors in our collective struggle to achieve sustainability. For investors, that means both investing in solutions, as well as taking on stewardship responsibilities: engaging with companies to try to secure that they have — and comply with — credible transition plans.
Transparency the enabler
However, one of the important factors in this mobilisation of capital is transparency: providing more clarity and insight into material aspects of companies’ operations. Without greater levels of transparency than exist today in the financial sector, it will be difficult for investors to target capital in the right companies, for companies to understand investors’ expectations and for asset managers to show investors a picture of what role their money really plays in the sustainability transition.
This is why we have supported many efforts in the finance sector to increase corporate disclosure, such as the CDP and many others.
So, this quarter, we touch upon some aspects of transparency, one of the most important tools we have as an asset manager for contributing to the achievement of sustainable outcomes.
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