Responsible investing - more than empty words
Investing responsibly – also referred to as Environmental, Social And Governance (ESG) – should be more than just empty words. This was a core theme at the annual conference held by the Principles for Responsible Investing (PRI) – a UN supported not-for-profit organisation.
SKAGEN has been a signatory of the Principles for Responsible Investment since 2012. We recently participated at the annual general meeting, called PRI in Person, for the second time. At the three-day conference, more than 600 participants listened to speeches and took part in workshops on topics ranging from climate change to the rise of green finance.
"Our participation at the annual PRI conference is a natural part of our long-standing commitment to sustainability in our investment portfolios," said SKAGEN's Investment Director Alexandra Morris, who leads the portfolio management team.
The PRI in Person conference was held in Singapore this year. There were participants from Europe, Asia, Africa, North America and Australia at a conference centre wedged between an ultra-modern city of steel and glass and one of the busiest shipping lanes in the world.
The shipping lane running past Singapore is the main route between the Indian Ocean and the Pacific Ocean, linking major Asian economies such as India with China, Japan and South Korea. Interestingly, more than 94,000 vessels pass through Singapore each year, carrying about a quarter of the world's traded goods, including oil and manufactured products.
Sustainability on the rise in Asia
It was therefore no coincidence that the conference was held in Singapore, which has a long tradition of bringing together people in a region not normally associated with a focus on sustainability. Still, something in the world's most populous region is changing – and fast.
"Sustainability is rising on the economic and political agenda more broadly across Asia," PRI Chair Martin Skancke told a full auditorium (video) on the opening day.
This was a view shared by the international magazine Forbes, which exclaimed that there is "a quiet revolution on green finance with China taking the lead."
Mandatory disclosure systems
The Forbes article covered a PRI in Person keynote speech by Dr Ma Jun, Chief Economist at the People's Bank of China, which is the country's central bank and financial regulator.
In his speech on efforts at establishing a greener and more sustainable financial system, Dr Ma Jun mentioned that China is moving towards a mandatory disclosure system for companies. This follows similar measures being taken by the Hong Kong and Singapore Stock Exchanges.
For SKAGEN as a global investor with many investments across the Asia Pacific region, these improvements in accountability and reporting are welcome. It is important to remember that investing is about risks and returns – and that sustainability is ultimately about handling investment risks in a holistic manner.
We are now looking forward to further improvements in accountability and reporting. Our ESG journey has not only taken us to Singapore, but also from the first steps of having a better-documented and integrated ESG policy to now having an A rating in the annual assessment report from the PRI. In July, we published an update on our ESG work.
Read more about why SKAGEN believes in responsible investing