September 26, 2011
Finding a link between company engagement and financial performance could be the tipping point for Responsible Investment, predicts Fredric Nyström, Key Account Manager and Engagement Coordinator at GES Investment Services, who will participate in an expert panel on this at the fourth annual PRI Academic Conference starting tomorrow in Sigtuna, Sweden.
The fully booked conference called “Dynamics of Responsible Investment” takes place on September 27-28 and strives to attract not only academics but also practitioners in the financial industry. The purpose is to make the academic world understand what investors want them to do research about and to give the researchers an opportunity to test their results on the investors.
The conference is arranged in cooperation with Mistra (the Swedish foundation for Strategic Environmental Research) and SIRP (Sustainable Investment Research Platform, funded by Mistra). Since 2006, SIRP has performed several studies on how sustainable investment practices can create added value for institutional investors. Many of them are based on risk rating data from e.g. GES Investment Services, while research explicitly focusing on engagement is rare in the academic world. Therefore, this would be an interesting and desirable next step for research, suggests Fredric Nyström, Key Account Manager and Engagement Coordinator at GES Investment Services, who will explore the opportunities for this in an expert panel on engagement at the conference.
“Previous studies have – despite some of them finding a positive correlation between a company’s financial performance and its management of ESG (environmental, social and governance) issues – not been able to convince the financial community. If we could prove that engagement with companies on these issues adds financial value, a lot more investors would move into Responsible Investment”, says Fredric Nyström.
“Obviously, one first has to establish which factors make a successful engagement. GES has developed a tool, GES Engagement Forum, which is a structured process based on the factors that we believe are essential. Since it has been in practice for over six years, we have a lot of historical data that would be interesting to test. Another question for researchers could be: when is it most beneficial to engage in collaboration with other investors and when is it more lucrative to do it individually?”
The conference also features keynote speeches by e.g. Meir Statman, Professor of Finance at the Leavey School of Business, Santa Clara University, on “Behavioural Finance and Sustainability”; Klas Eklund, Senior Economist at SEB, on “Green Capitalism”; and Rob Bauer, Professor of Finance at University of Maastricht, on “The importance of shareholder engagement”.
Two awards will by presented by SEB (main sponsor) and the Umeå Scool of Business, respectively, to researchers with the most outstanding conference papers.
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