Financial institutions that manage $2,000bn (£1,100bn) of assets promised yesterday to haul ethical investment into the mainstream with the launch of Principles for Responsible Investment.
The scheme, crafted with the United Nations, was launched with some pomp at the New York Stock Exchange, where the UN secretary general, Kofi Annan, rang the bell that marks the start of each day's trading. He was flanked by signatories from the 32 pension funds, foundations and government funds that have joined the scheme, including Hermes, which runs BT's pension fund. They called the guidelines "historic".
But the initiative was met with scepticism by environmental groups. "It seems we get some kind of funky new initiative every other week," said Craig Bennett of Friends of the Earth.
"Voluntary initiatives make very little difference, if at all. Do we really think that in the boardroom when it comes to crunch decisions about competitiveness, lowering costs and sourcing that they have any impact?"
The six guiding principles comprise incorporating environmental, social and corporate governance issues (ESG) into investment analysis; becoming more active investors (filing resolutions consistent with ESG policies, for instance); seeking greater transparency from companies; promoting implementation of the principles among other financial institutions, pooling resources, and reporting on progress. The guidelines took almost a year to draw up.
Colin Melvin, head of corporate governance at Hermes, said: "The significance is that this is investor-led. These are some of the biggest asset managers in the world getting together to accept responsibility for their investments. This is part of a general development in [ethical investment] and I think it will accelerate things."
The initiative does not aim to draw up lists of banned or preferred companies but instead to engage with boards, to set in place sustainable environmental and social policies. More straightforward ethical investment, excluding oil or defence companies for instance, has become popular in Britain. According to the research group EIRIS, the amount in ethical funds has grown from $200m in 1989 to an estimated $5bn.
