Author: Kira Shevchenko
, Richard McManus & Janet Haddock-Fraser
Summary:
Sustainable investing includes the application of non-financial (Environmental, Social and Governance (ESG)) criteria to asset selection in institutional investor portfolios [Capelle-Blancard, G., and S. Monjon. 2011. -Trends in the Literature on Socially Responsible Investment: Looking for the Keys Under the Lamppost.- Business Ethics: A European Review 21(3): 239-“250]. The article explores the implications for applying ESG screening to the institutional investors making the asset selections. Institutional investors are a heterogeneous group of investors, with fund managers specifically being some of the largest listed organisations globally [Ingley, C. B., and N. T. van der Walt. 2004. -Corporate Governance, Institutional Investors and Conflicts of Interest.- Corporate Governance 12(4): 534-“553]. Whether their own corporate management duties to fiduciary governance (the G in ESG) benefiting their shareholders has any material impact on the financial returns outcomes of the pension asset management contract, and specifically whether there is a fiduciary conflict favouring of the exclusive best interest of fund management shareholders is the question addressed by the paper.
