Investing in change
8th March 2007
Gareth Hughes, Climate Change Capital’s head of corporate development, outlined today the growing opportunities for corporations in the capital markets if they can prove they have superior environmental performance.
Speaking at Ethical Corporation’s latest conference he painted a picture of a marketplace where the political will, regulatory framework and investor dynamics all now point one way - towards rewarding corporations with strong environmental systems and performance and discounting those were the risk to earnings from environmental factors is large or unclear.
Nick Robbins, head of sustainable investment at Henderson Global Investors, pointed to the arrival of new investment products as a consequence of this trend as several speakers testified to the fact that environmentalism is the agenda, not the periphery any more.
The impact on management systems is broadly clear too. Several speakers highlighted the fact that there remains a number of competing standards by which environmental impacts and company behaviour can be measured and a continuing debate about what and how to measure and report on this (see Anne-Marie Warris’ podcast on EU ETS, for example).
But the direction was clear according to Jane Milne, from the Association of British Insurers, non financial reporting as a whole is becoming more important from a risk assessment and management perspective. As a consequence, we’ll see environmental data move from the specialist space of the environmental report to the mainstream financial report, and perspectives shift from a company focus to value change one.
Or put another way, the need for better business assurance provided by properly integrated global management systems is racing up the management agenda driven by the need to solve the problem of climate change.
